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bigduckontax, Accountant
Category: Tax
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VAT Question: My company has subscribed in a third

Customer Question

VAT Question: My company has subscribed for shares in a third party company. The majority of the consideration for the shares will be satisfied by my company providing services (and invoicing in the usual way) to the third party. Will the third party be able to recover the VAT that we charge on our invoices from HMRC?
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello, I am Keith, one of the experts on Just Answer, and happy to help you with your question.
Yes, they can, of course, providing that the third party is registered for VAT also. They would do that as normal on their quarterly return.
I do hope that I have helped set your mind at rest on this matter.
Customer: replied 2 years ago.

OK, perfect, thanks Keith.

Expert:  bigduckontax replied 2 years ago.
Delighted to have been of assistance.
Please be so kind as to rate me before you leave the Just Answer site.
Customer: replied 2 years ago.

Actually, just to be clear, my concern was that:

1. the services were being invoiced plus VAT but

2. The client was offsetting the net amount against the share subscription debt and only actually paying us the VAT element of the invoices.

Still OK?

Expert:  bigduckontax replied 2 years ago.
Perfectly acceptable; the client has the full VAT invoice to support their input tax position. Their cash machinations are an irrelevance as far as you are concerned.
bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 2 years ago.
Thank you for your support.