me in the direction of checking how to make a vat claim where business A has paid a cost of business B and business A has claimed the vat? I thought you had to use the cost in your business to be able to claim the vat ie who paid wasnt important -it was who used the costs?
help?
vat
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As I said before ...
A has made the mistake of claiming B's input tax and must correct its error on its next VAT return. B is entitled to the input VAT on an invoice addressed to B for goods or services supplied to B and should claim it on its next VAT return, if it has not already done so. Presumably, A will wish to be reimbursed by B for the gross cost of the invoice, but we don't know the relationship between the two companies.
thanks all
Penny - you're right - i forgot to mention that business B invoiced - so as long as the invoice is issued to the user of the cost it is irrelevant who has paid for the goods - as it is obviously the user of the cost who is only entitled to vat relief - agreed?
If this was simply incompetence and both parties wished to rectify matters what would be the best way forward?
thanks again
Yes, but
Euan is correct if the circumstances are as he assumes - but there is nothing in the question that indicates to me who has received the VAT invoice, all that is mentioned is the fact that A paid for the goods/services in question. That is why I asked the question - to start scaremongering about SOCA etc without knowledge of the full facts is a little presumptious!
Yes, but
... it sounds as if the invoice was made out to B for goods or services supplied to B for use in its business. If so, A has no right to have claimed the input VAT and the matter cannot be resolved by B sending a VAT invoice to A because B has not supplied any goods or services to A. A is wrong to have claimed B's input VAT and on being told this, A should correct the error on its next VAT return; if it does not, it is committing a money laundering offence and should be reported to SOCA.
Who has
the VAT invoice?
To recover VAT the claimant must hold a valid VAT invoice in their name.
Assume the services/goods were supplied to B for the purposes of its business but the invoice was raised to and paid for by A. In the first instance, neither business can calim back the VAT as (a) A has not incurred the expense for the purpose of making taxable supplies and (b) B does not hold a valid VAT invoice. What A should do, then, is re-charge B raising a VAT invoice, with B then in a position to recover the VAT.