Forum

• # 53783
• Fri 14 Jan 2011 08:44 PM

Good to see a section for technical queries.  I tried at the start of the week to get an answer for the first time form the ICB on a technical query and am still waiting.

I ended up getting the answer from the AAT forum/
. 

• Pamela Dillon FMAAT MICB

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• # 53793
• Sat 15 Jan 2011 01:35 AM

What was the query out of interest.

• Forum Moderator, South East & Greater London Regional Chairman
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• # 53794
• Sat 15 Jan 2011 09:07 AM

The query was on how to deal with an invoice my predecessor had not posted in Sage which had been paid via credit agreement.

The company operates VAT Cash accounting and uses Sage.  They had been claiming VAT on the monthly payments and I believed they should not have and wanted to check how to sort it out and check I was correct about the VAT. 

• Pamela Dillon FMAAT MICB

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• # 53823
• Sun 16 Jan 2011 07:00 PM

Pam

The correct treatment re the VAT etc would really depend on the type of credit agreement that had been used for the purchase of the goods I would have thought. Is the business a sole trader or limited company.

cheers
Stuart 

• Forum Moderator, South East & Greater London Regional Chairman
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• # 53827
• Sun 16 Jan 2011 08:02 PM

Hi Pamdill 

My understanding of Cash Accounting is the Vat element is claimed at the point when a payment is made . so therefore if they have been claiming using the monthly payments the I would presume they are correct.

 I notice Stuart had mentioned about Credit agreement, so maybe the ICB could give their view,  but I would only use the invoice for claiming the Vat if you were not using Cash Accounting as you cannot claim Vat back in Cash Accounting until a point of payment has been made. 

It should make no difference if the company is Ltd , Partnership or Sole trader as  the Vat rules are the same.   

I would appreciate if the ICB could check the point about the type of Credit Agreement as Stuart has mentioned. 

• Sarah Douglas C.FICB

  HouseTree Business Ltd 

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• # 53871
• Mon 17 Jan 2011 03:52 PM

I agree the only relevant point is the type of agreement in place it was HP or a lease purchase agreement (Depending on whether it is for an individual or ltd company) then this is an off balance sheet purchase and the VAT should be claimed monthly as paid.

However if the credit agreement was more of a loan type and the good belong to the client and not the credit provider then the VAT should have been claimed back at the point of purchase as this was when the goods were technically paid for.

In a nutshell it comes down to who has title for the goods

• Forum Moderator, South East & Greater London Regional Chairman
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