If a VAT registered business buys a computer through Quidco and receives cashback at a later date, should there be an adjustment to the amount that is being claimed as input VAT? I have read HMRC Notice 700/7 para 9 re cash-backs, however this seems to specifically refer to cash-back payments made by a manufacturer. From Quidco's terms and conditions it seems that the cashback is generated from referral fees which are passed on to the end customer, so maybe they don't fall within para 9? Can anyone help clarify the VAT implications as a result of the cash-back payment? Many thanks.
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cash-back
A cash-back is effectively a retrospective discount, which would result in an input tax adjustment. (Sight of the Ts & Cs would help to confirm this.)