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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
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Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I wonder if you can help, I am a new company, and I am getting

Resolved Question:

I wonder if you can help, I am a new company, and I am getting conflicting advice from colleagues.
I have employed some non ~VAT registered sub contractors, for a project.
One of my colleagues says my company can claim the VAT, for (Expenses only) for the project submitted by the sub contractor, as the sub contractor cant because, they are not VAT registered.
Is this correct?
One colleague says the expenses belong to the project and since the sub contractor cant claim the VAT, my company can claim the VAT on the expenses submitted.
My other colleague says, no, the expenses belong to the sub contractor, and the VAT just has to be fore-fitted because they are not VAT registered.
Obviously I want to submit my returns correctly.
Lynne Noble
Submitted: 2 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 2 years ago.

Hello and welcome to the site. Thank you for your question.

You can only claim VAT on invoices that are addressed to your company and the suppliers' VAT Reg No has to be on the invoice.

If you have subcontracted the job and the subcontractor is not VAT registered, then you can't reclaim VAT on those expenses recharged to you by the subcontractor.

I would agree with your third opinion ... i.e. No, the expenses belong to the subcontractor and the subcontractor is not VAT registered..

I hope this is helpful and answers your question.

Customer: replied 2 years ago.

Thank you for your answer.

Would you be able to supply the section of the HMRC documents that state this.

I would just like to send something in writing to my colleague, I just prefer to have the document, rather than try to explain.

I t would make me feel much more comfortable.

Thanks

Expert:  taxadvisor.uk replied 2 years ago.
Lynne, thank you for your reply.

I can refer you to VAT guidelines that state you must keep VAT records to support your cliam and also you musi also have valid VAT invoices.

As your subcontractor would be invoicing you for subcontact work without a valid VAT invoice you won't be able to reclaim VAT, I'm afraid

More information on this can be found here

https://www.gov.uk/reclaim-vat


I hope this is helpful.
Customer: replied 2 years ago.

HI

Thank you, ***** ***** just clarify, that it is the expenses that we are talking about, e.g. transport, hotels etc.

I know the answer, but just want to be completely sure.

Thanks

Expert:  taxadvisor.uk replied 2 years ago.
Lynne, thank you for your reply.

Yes, we are referring to expenses charged to you.

I hope this is helpful.
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4881
Experience: FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
taxadvisor.uk and other Tax Specialists are ready to help you
Customer: replied 2 years ago.

Thank you,

That was my understanding of it. Now I just have to explain to my colleague, who think s he knows all about it!?!

Wish me luck.

L

Expert:  taxadvisor.uk replied 2 years ago.

Lynee, thank you for your reply.

I wish you all the best....

If you are happy and there are no more issues I will appreciate if you would kindly rate/accept the service I provided to ensure I get credited for it.

taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4881
Experience: FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
taxadvisor.uk and other Tax Specialists are ready to help you

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