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Client has made a purchase of stock while furlough

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my client has made a purchase of business stock while furloughed.

 

I thought he was not allowed to do work for his company while furloughed.

He said the purchase was arranged prior to being furloughed.

 

I guess that's ok.

 

But what about if clients have made actual purchases of business stock while furloughed. Can they claim VAT on business stock purchased while furloughed in their vat return ?

Is that allowed?

 

 

 

Replies (14)

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RLI
By lionofludesch
01st Jun 2020 20:12

Of course.

The problem is the furlough claim, not the VAT return.

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Replying to lionofludesch:
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By Paul11
01st Jun 2020 20:31

"The problem is the furlough claim"

He should not have a furlough claim if hes bought business stock.

Is that what you mean

thanks

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Replying to Paul11:
RLI
By lionofludesch
01st Jun 2020 21:08

He's working.

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Replying to Paul11:
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By Cheshire
01st Jun 2020 21:11

Ordering stock is not a statutory duty

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Replying to Cheshire:
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By sammerchant
08th Jun 2020 17:17

But if he believes that the stock is available at a lower price and/or may not be available after the lock-down ends, is he not saving his business? Which, as I understand it is the duty of every director.

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Replying to sammerchant:
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By Cheshire
08th Jun 2020 17:31

I get what you are saying. But by that argument, is a Director agreeing a new contract that may or may not be available after the lock down ends, which might save his business allowed?

Yes buy stock at a lower price if that will save your business. Yes agree the new contract. But then do not claim the furlough grant.

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Replying to Paul11:
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By Ben McLintock
01st Jun 2020 21:59

Do you think an HMRC inspector would disallow an entire claim? It could be that the client had at least 3 weeks furlough prior to this incident, and at least 3 weeks after. In which case, surely no more than a day's worth of claim is at stake?

I'd have thought that enforcenent of the rules will be focussed mainly on those cheating the system i.e. out-and-out fraudsters, rather than these isolated incidents of stupidity.

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By Ben McLintock
01st Jun 2020 21:36

Is he a one-man band, or are there other staff in the business who were not furloughed who dealt with O/S orders?

I can quite believe it was ordered before he was furloughed. Our retail manager went on furlough at the end of March with a whole pile of stock orders left at various stages.

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RLI
By lionofludesch
01st Jun 2020 21:44

I don't have a problem with taking delivery of stock already ordered.

It's the ordering of stock I take issue with.

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By garforth
01st Jun 2020 23:59

It is an interesting point as maybe in order to get back trading he has to order the stock weeks in advance. Doing it whilst furloughed may in fact be saving the taxpayer .

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By paul.benny
02nd Jun 2020 08:38

Why has client purchased this stock now? If s/he is a retailer planning to reopen on 15 June or a manufacturer preparing to restart, I would say the activity is fine. The business is not generating revenue as a result of client activity.

But if client is also selling the stock, s/he is clearly not furloughed.

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By pauljohnston
08th Jun 2020 11:57

Looks like another case for HMRC to investigate because of breach of furloughing rules. What ever we may think or feel the furlough means no business activity. So receiving the stock he broke the furlough rules.

For me this is the reason that the rules that change in July to allow part time working should have started much earlier.

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Replying to pauljohnston:
Hallerud at Easter
By DJKL
08th Jun 2020 12:06

Yes, they were daft.

I am not furloughed but if I were I would not have been able to order and take delivery of all the various handgels/signs/dispensers etc that we will need to let us reopen. Getting all this has, off and on, from ordering, sorting customs etc and paying import duty and vat and taking delivery/dropping down at office, taken weeks.

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Morph
By kevinringer
08th Jun 2020 13:18

Is receiving stock a statutory duty? I don't think so. There's no problem with the VAT but there is with the furlough claim.

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