Company A is a small newly formed building company
Company A enters into a joint venture with company B which is owned by a wealthy individual.
Client A pays sub contractors subject to CIS scheme
Company B lends company A the funds to pay the SCs but no profit element. Invoices are not raised.
The costs of the SCs are funded by a loan from company B
When the project is complete company A will debit its costs to J V account
When the project is complete company B will debit its costs ( property purchase and materials) to J V account
The joint venture profit will be shared equally between the two companies.
The property will be sold by company B which owns the property but the completion statement will show an amount due to company A for its share of JV costs and profit
What is the VAT position?
Colum Jezierski