Vat

lgarside

Hello I was wondering if someone could help with a VAT question. If a company pays for training costs and they pay 50% up front (after receiving a chq rqst for the whole training cost) and the remainder upon completion are they able to claim all the vat in the month they issue the first chq ie 50% even though they won't be paying the remainder until say 9 months time?

Also are they able to claim the VAT back if they are reimbursing the employer because technically they are not paying a VAT invoice, the employer has already paid this.

K H

vat

If the training company have submitted a proper vat invoice not an 'application for payment ' or pro forma request then i'm pretty sure that when it is eventually paid is not an issue and vat can be claimed in full on the original invoice .However, the training company would be a bit foolish to pay vat on a supply they haven't yet made so a close look at the invoice would be appropriate as the tax point would surely be shown.

i believe that if the employee reimburses the company then this will be an output for the company ( a recharge) and therefore vatable.

K H

NeilH

Hi

The VAT is reclaimable based on the date of the VAT invoice – this is the tax point. Unless the company is on a cash accounting scheme for VAT, VAT is reclaimable based on the tax date.

If the company has paid for the training and the employee is reimbursing the company, then strictly speaking the company should not reclaim the VAT. In the strictest sense the company should be reclaiming the VAT initially (in affect they have purchased the training) and then become liable for the VAT of the recharge of the cost to the employee (they are now making a vatable supply).

Neil