We are due to receive a refund from HMRC regarding an overpayment of VAT i.e. VAT was paid in error when it should have been zero rated but system generated standard rate VAT. How should this refund now be treated in year end accounts i.e. income or negative expenditure for my year-end accruals?
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Probably / possibly neither of the options you have concluded. Best to take the advice above & discuss it with / leave it to your accountant who will have the knowledge of your circumstances necessary to properly advise. Classification of VAT Refund from HMRCWe are due to receive a refund from HMRC regarding an overpayment of VAT i.e. VAT was paid in error when it should have been zero rated but system generated standard rate VAT. How should this refund now be treated in year end accounts i.e. income or negative expenditure for my year-end accruals?