Claiming VAT without invoice

Claiming VAT without invoice

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Hello, just after a little clarification. I have a client who holds both an HP account and general trading account with a supplier.  He tends to send payments of £100 or £200 to the supplier, £35.00 of which is  the agreed HP repayment, the balance goes towards reducing the trading account but never pays an invoice off in full. The invoices clearly show the allocation of the payments made. HMRC have said that as long as there is an invoice to support the payment, the VAT can be calculated on the amount paid over  to the trading account as he is cash accounting.  The problem is, he has been known to miss the odd HP payment. Where I have had statements and invoices, I have been able to reconcile the payments but where I have no proof as it were, (other than the amounts shown on the bank statement) I can't assume that every HP payment has been made on time and cannot assume that an HP repayment is included in the amounts paid. I am therefore not comfortable calculating VAT that could be due to the trading account. My question is, how am I best to proceed? Do I just include the amounts that have no supporting evidence inclusive of VAT in the purchases section of the VAT return and make a VAT adjustment if the invoices or statements become available or do I exclude them from the return completely? Any help would be greatly appreciated.

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By pawncob
04th Mar 2015 11:13

HP?

Ask the supplier for an HP statement. This will show the instalments paid and enable you to calculate the purchases element.

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By brownem
04th Mar 2015 11:19

Thank you for your response,

Thank you for your response, it is appreciated. I have asked for one but had nothing back yet and my client difficult to pin down due to the nature of his work.. I need to get the return submitted ASAP really as it was for the period ending 28th Feb.

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paddle steamer
By DJKL
04th Mar 2015 12:10

What about interest?

What about any interest inherent within this arrangement, how is that treated (isolated) out of the payments, if applicable?

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By brownem
04th Mar 2015 12:46

Sorry, are you referring to interest charged on the trade account because if so, from the information I do have, I can't see that any has been applied? This is a new client for me, so apologies if I come across as a bit vague.

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By jndavs
05th Mar 2015 08:42

Take a view
Given that the HP and trade balances are with the same supplier, I would assume that the HP is being repaid under the agreed terms and treat the balance as trade.
You may end up underclaiming input vat in the short term, but this should sort itself out next quarter.

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