VAT

VAT

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Hi,

Could someone please confirm the following VAT Q:

The client is VAT registered and we are VAT registered, I have been asked to pay the clients invoice that is addressed to them and raise an invoice and recharge them including VAT.

I am a little confused if we should process a VAT invoice addressed to a client and then recharge them, could someone advise please.

Replies (5)

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By Les Howard
12th Nov 2013 10:45

Hmm

Strictly, you cannot claim VAT on an invoice addressed to a different business.

If the third party has done work on your behalf for the client, or for you, then have them address the invoice to you, and then you can re-invoice.

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By SimonLever
12th Nov 2013 10:50

No

You can only claim the VAT if the invoice is made out to you. If you pay the client's invoice you are not entiteld to claim the VAT as input VAT.

The recipient of the goods or services is the only party entitled to recover VAT incurred on expenditure for business purposes and therefore you cannot even have the invoice made out to you to recharge it

More interesting point would be to know why the client does not want to pay the invoice direct. They obviously have the funds if they are going to pay you.

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By Chris Smail
12th Nov 2013 11:07

Make sure the client pays you first

I can only see this going one way.

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By neileg
12th Nov 2013 12:57

Mmm...

You would get caught for the VAT. As others have said, you can't reclaim the input tax for two reasons, the invoice isn't addressed to your firm and the supply of services was not to your firm. So if you re-invoice your client, you'll have to declare the output tax but cannot claim the input tax.

Sounds to me like the client wants to dress up the original transaction as something different. Money laundering springs to mind.

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By MacW
13th Nov 2013 09:49

Thank you all very much.

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