Payments in advance for building materials, fraud.

Building materials were never received - allowable for corporation tax?

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My client undertook a new build project for new business premises.  They made several payments in advance to a builder for items such as windows etc. None of the items were ever received and the builder has done this to numerous other customers. My initial thoughts were that because the costs were for capital items then they would have to be absorbed into the overall cost of the building which has now been completed by a new builder.  However, this looks like fraud and the costs are significant.  Is the client able to claim these costs against revenue for corporation tax purposes?

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By johngroganjga
23rd Jul 2017 16:35

How are you accounting for the payments? The tax treatment comes after the accounting treatment, and usually follows it.

Has your client sued the builder to recover his money? If so, with what result? If not, why not?

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