Sean McGinness (Saffery Champness) answers a query on the mechanism for adjusting a VAT position on unpaid debt when using ordinary VAT accounting.
Question
We are a company that invests in various start-ups. We supply a range of services to our investee entities. One of our new entities which is separately VAT registered has been invoiced for management services provided to it. As it has not yet commenced trading we have allowed longer payment terms of two years from the date of the invoice. The invoice was issued just over six months ago and we have not received any payment. I have been asked by management if we can claim a relief once the debt ages over six months. We paid the VAT to HMRC. Is this correct? We have never done this adjustment before for any supplies made. Also...
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Sean McGinness (Saffery Champness) answers a query on the mechanism for adjusting a VAT position on unpaid debt when using ordinary VAT accounting.
Question
We are a company that invests in various start-ups. We supply a range of services to our investee entities. One of our new entities which is separately VAT registered has been invoiced for management services provided to it. As it has not yet commenced trading we have allowed longer payment terms of two years from the date of the invoice. The invoice was issued just over six months ago and we have not received any payment. I have been asked by management if we can claim a relief once the debt ages over six months. We paid the VAT to HMRC. Is this correct? We have never done this adjustment before for any supplies made. Also...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
