I have invoiced a company with a value inclusive of VAT in error - but have no VAT number.
They have paid the bill + the vat
can i keep the VAT - what is the legal position
d wilson
Replies (3)
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Come clean
As a non VAT specialist,I work on the commonsense principle. You have made a genuine error, but nevertheless have represented yourself as collecting the tax on behalf of the Chancellor. The client Company will wish to set this input against its output tax.
Issue a revised invoice, and send a refund of the "VAT" to the client with an apology. Now being aware of the facts, to keep quiet would be dishonest.
Flee the country
Use your ill-gotten gains to flee the country and live in the lap of luxury in Rio de Janeiro. Hey presto...you are now an exiled fraudster!!!
VAT Query
If you have mentioned "VAT" or similar on the invoice, then you need to refund this to your customer asap - with a credit note and reinvoice. To keep the VAT is an offence.
If you have not mentioned "VAT" and just upped your "normal" price by 17.5%, then you can keep the difference - although you might not keep your customer when he realises that he cannot claim it back from HM C&E on his VAT return (assuming he is VAT registered).