Unrecoverable VAT - VAT return treatment.
All these years and I've never given a real thought to this until now...
On VAT standard-rated purchase invoices on which the VAT is not recoverable or disallowed, eg entertaining expenses, what is the correct treatment for the net and VAT items? Presumably the net, because it is standard-rated, will be included in box 7 on the VAT 100, but what about the unrecoverable or disallowed VAT? Where should that be shown, if anywhere? It isn't outside the scope of VAT because it is VAT itself. It is based on a standard-rated item but HMRC clearly states that items entered in box 7 should not include any VAT.
If you add it to the net and show it in box 7, that is not a true figure. For years my staff have treated it as standard-rated and included it in with the net amount in box 7. Agreed, it needs adding to the net cost for accounting purposes, but how about for VAT return purposes?
HMRC website appears silent on the matter. Anyone any ideas or thoughts? Or is there a definitive answer?
- Invoice Help 394 11
- CGT 34 2
- is my company accounts right? 807 22
- Corporate shareholder question 188 3
- Dissolving company to avoid CCJ 260 4
- What can my client claim r & d on? 82 1
- Do I need to report this to SOCA 3,012 28
- Rental property: expenses when up for sale and not let 394 9
- Class 2 National Insurance contributions 371 6
- Sage valuing foreign bank balances 86 2
- What are options for non CA firm 2,509 55
- Exactly which business miles can I claim from my employer? 1,559 21
- Gong round in Circles with CT600 121 1
- P11D Dispensation 110 1
- I have missing sales invoices 384 5
- VAT on sales net of CIS suffered 276 8
- Summer evenings and ponderings of capital allowances 375 5
- Have I dropped a major clanger? 1,037 19
- Errors in prior year accounts 1,062 26
- Directors Subsistence 235 1
- Property exchange - 8-year legal delay following fall-out 556
- Cancelled 320
- SAGE Payroll Data for Import to MS Dynamics AX 320
- Cancelled 269
- Have you staged yet for auto enrolment? 225
- Married woman dies owning marital home 223
- Probiz 212
- What's the market like for temps? 201
- CIS Deductions 171
- Phishing emails purporting to be from CIPFA? 163