My client (A) won a tribunal case against a client (B) who had a contract with them for work to be done over a period of time. B just stopped telling them where the next address to be refurbished was to be.
A won the case & B had to pay costs and damages for loss of profit to A. This has happened. I have no paperwork to show exactly how much was paid for each element.
However, I have to complete their VAT return (A's) by tomorrow night. Is there VAT on the income to A?
It makes the difference between paying or receiving VAT.
Replies (3)
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Too complex to offer an opinion without more info.
That aside file the VAT return 'worst case scenario' and adjust on next return after more thought can be given!
I am sure that's right for VAT. But, as you say, it will be taxable trading income for CT purposes. I am sure that the calculation of the sum in question will have taken those two outcomes into account.