Netting off costs before applying Vat

Netting off costs before applying Vat

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I carry out £3000 of work for you and say you carry out £2000 of work for me. Instead of both parties invoicing their respective amounts plus vat, I just to invoice the difference (£1000 + vat).

Nureyev

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By theaardvark
07th Dec 2006 09:22

No.
If the businesses are VAT registered, HMRC will insist that invoices are raised for the full value of both supplies.

Regards

Paul Taylor
Dains

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By User deleted
07th Dec 2006 09:25

VAT is chargeable on the value of the supply
The value of the supplies in a case of part-exchange, which is what you have set out, is the value of the supplies made for a consideration, whether that consideration is in money or in services.

VAT is therefore due on 3k and 2k.

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