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bigduckontax
bigduckontax, Accountant
Category: Tax
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on last vat return purchaes plant equipment have claimed back

Customer Question

on last vat return purchaes plant equipment have claimed back for a repayment on this return took out hp to fund invoice is dated 31st july hp agreement is dated 11th august vat have informed me claim is not valid , please advise i think i am correct as supply was to us not the hp company who are the funders
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello, I'm Keith and happy to help you with your question. How did the VAT people get involved anyway? It sounds a perfectly normal VAT transaction like the thousands done every day.
There are two things to consider here. Firstly who issued the invoice for the purchase of the plant equipment and when was it dated? This is the input tax on that invoice which you should be reclaiming. The claim would be valid in the quarter in which the first payment to the HP company was made.
Customer: replied 2 years ago.

invoice dated 31st july to supply us.

HP Agreement was dated 11th August first payment end of August.

Expert:  bigduckontax replied 2 years ago.
With respect, what is the problem? The input tax would be reclaimed in the quarter corresponding to the August payment.
Customer: replied 2 years ago.

i have claimed in July 1/4 not August claimed on the information on the vat invoice not hp agreement

Expert:  bigduckontax replied 2 years ago.

But who queried the reclaim? If you are using traditional accounting then the July quarter would be appropriate, if you are on a cash basis then the August. It really doesn't alter the price of cheeses as my old boss used to say except in your cash flow [important] and the VAT authorities [frankly unimportant.] Either way you will be getting the input tax refunded; that's what VAT is all about.

Customer: replied 2 years ago.

vat office queried claim yes traditional accounting , yes i know it does not matter either way as it is valid claim just principles at stake here you know what vat are like .


and it would help cash flow now.

Expert:  bigduckontax replied 2 years ago.
Well, actually I have always found them extremely helpful whenever I have had to contact them, but, of course, it depends which particular Civil Servant to whom you spoke! I concur with your opinion, it should be in the July quarter. I would be inclined to continue the correspondence with the VAT office with a view to them changing their stance. I would be equally niggled were I in your position.
Customer: replied 2 years ago.

Thank you just wanted that confirmed.

Expert:  bigduckontax replied 2 years ago.
Delighted to be of assistance.

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