Transactions with directors: should you include vat or not?

Transactions with directors: should you include...

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I should be grateful if someone could advise. Say the director invoices the company for consultancy fee, £1000 plus Vat. Total £1200.

In the Related Party Note, do we show £1000 or £1200?

Thanks

Replies (9)

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By aadil
24th Mar 2016 15:45

Any advice?
Any advice please? Thanks

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Scalloway Castle
By scalloway
24th Mar 2016 16:11

£1,000

£1,000

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Portia profile image
By Portia Nina Levin
24th Mar 2016 16:20

£1,200

£1,200

Now what are you going to do? Apply some commonsense maybe?

Thanks (1)
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By aadil
24th Mar 2016 16:31

Thanks to both of you.

I would think it should be 1200 because that is what has been paid to the director, although the cost to the company is £1000.

That is how my common sense reasoning is.

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Portia profile image
By Portia Nina Levin
24th Mar 2016 16:33

Well the right answer is £1,000.

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By cheekychappy
24th Mar 2016 16:36

The director has invoiced £1000 + VAT and common sense tells you that the answer is either £1000 or £1200.

I applaud you for showing such intellect.

Thanks (3)
RLI
By lionofludesch
24th Mar 2016 21:02

Never occurred to me

It never occurred to me that there would be a dichotomy of opinion on such a matter.

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By andrew1211
25th Mar 2016 10:50

Surely it depends

VAT registered? Or not? Surely the answer is obvious!!!

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By Alastair Johnston
25th Mar 2016 11:14

Don't forget ...

... the employer's NIC, as this is probably really a salary.

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