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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4191
Experience:  FCCA FCMA CGMA ACIS
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M&S Accident Repairs Ltd repair cars and commercial

Customer Question

M&S Accident Repairs Ltd repair cars and commercial vehicles, we have a situation where a customer has had and accident and the cost to repair the lorry is £30,000 plus vat.
The customer has paid the rental and the surcharge for the accident (£500) but has be told by the insurance company that they must pay the vat for the repairs circa £6000 and then claim it back. The customer does not have the money to pay this and the vehicle remains untouched to date (3 months) Is there any way this situation could be resolved with an official waiver from the inland revenue as this money just goes around in a circle?
Kind regards
Martin Jones
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.

Hello Martin, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.

Unfortunately this matter is one of the vagaries of VAT and insurance.

A possible solution here is to obtain a short term bank overdraft to cover the adverse cash flow position until the input tax can be reclaimed on the routine quarterly return, You can always ask HMRC for assistance, The Inland Revenue, who never dealt with VAT anyway, was absorbed into HM Customs and Excise who did to form HMRC some years ago. in this exceptional situation ask for such inputs to be accepted as a special case for reimbursement.

I am so sorry to have to rain on your parade.