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?
- Taxfiler - SA100 - More efficient? 717 5
- See you all on the other side 736 6
- 12Pay 504 2
- dividends 707 2
- R&D 356 1
- Quarterly Reporting - The Logistics 1,215 17
- Auto enrolment contribution rates 469 3
- How long are you waiting for appeal reply 460 4
- Borrowing money to loan to company 412 1
- Mother as Guarantor for Son's mortgage 568 5
- Seeking a tax case 677 9
- When do we qualify for state pension? 537 4
- Companies house strike off 633 3
- Tax treatment of alterations to property 473 2
- Moving to the cloud 775 9
- Iris open space/doc exchange for SATRs 225 2
- How much to charge for payroll? 935 16
- Unincorporated charity transfer to CIO 231 4
- BTC vs Digita 1,113 29
- Has anyone tried calling HMRC to get tax on dividends put in code? 527 4
- HMRC Joint Filing 572
- Capital Contribution towards a company car 427
- Capital Reduction & Impact on EIS Shares 378
- IRIS and FRS 102 362
- National Minimum Wage issue on Directors joining a Workplace Pension 343
- Capitalising Finance Lease 339
- Marginal rates of tax 327
- USA help 326
- Class 2 NI 319
- Dormant company accounts under FRS 102 304