Intercompany recharges

Intercompany recharges

Didn't find your answer?

Hi

I'm sure this has been asked many times, but I just want to clarify the VAT position for intercompanies.

Company A has bought a computer for an employee of Company B - both companies are in the same group, being owned by a Holding company.

Company A has paid VAT on the computer purchase.  Company B is not VAT registered as it has only just been formed, it also does not have a bank account.

My thinking is, A raises an invoice to B without VAT.  But how does B then settle the invoice?

Also, the employee is paid through A so this needs recharging to B - is the cleanest way via an invoice?  Or can these transactions be done through an intercompany account?

Replies (1)

Please login or register to join the discussion.

Routemaster image
By tom123
23rd Jul 2015 16:26

Under what basis would you raise an invoice without VAT?

As company B is not VAT registered, I am intrigued under what basis you think an invoice to them should be without VAT?

Once both companies are VAT registered, AND if you apply for group VAT registration, Then you can omit VAT on interco charges.

Thanks (0)