Hi,
I am trying to sort out my late fathers final return, In March he was paid a sum of money from the housing executive for completing some grant work.
are payments from grants an input, output sale or purchase? I am a little confused presently at which box to enter the vat in on the return.
Thank-you.
Replies (9)
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Grant income
If VAT is due on the grant, that is entered in Box 1. But if the income is non-business, no VAT is payable. The value is entered in Box 6.
Not wishing to cause grief
but this can be a tricky subject, so best to be sure.
If the money is a pure grant then it is outside the scope of VAT and so doesn't appear on the VAT return at all.
If however your Father carried out the work for the housing exec and, in return, received the "grant" then it could well be regarded as VATable income, whether any VAT was mentioned or not.
Unclear
It's not clear to me whether the grant was to the OP's father or to a customer of his, with the OP's father completing the work and getting paid direct from the housing executive.
20%
Afraid it'll be 20%, assuming that the invoice was issued since 4 Jan 2011 - or the work was done since then if there is no invoice.
From your father's point of view, this isn't a "grant", it's just ordinary sales. The grant was paid to his customer - albeit there's been some shortcutting.
Inclusive?
the final completion of works document just gives the total inclusive vat so I will just work it out 20% of it
If it is inclusive - the VAT element won't be 20%, it will be 16.67% or 20/120
Seeing as VAT is mentioned,
and regardless of who the contract is between, I'd just add 20% VAT (it's not unusual for standard forms to quote out of date VAT and tax rates, although I've not seen purchase tax for a few years now!)