import tax from malaysia

lorraine

Hi All,

If my client imports cooking oil from malaysia can this be put through the accounts to reduce his profit i.e. as a business expense, he is self employed and filters oil for pubs and restaurants in the uk.

Also if he has paid VAT on the oil can this be claimed back via his vat return???

All help appreciated!

sdv

Is the cooking oil for his personal use or business use?

lorraine

it is for business use.

sdv

Then you can legitimately put it through as a business expense. Pay the import duties/VAT and reclaim the input VAT as usual.

PGM

Is the VAT UK or Malaysian?

lorraine

hte plot thickens.....the oil suppliers are fraudsters, therefore client has paid but no oil has been received, does anyone know how I should account for this now???. Also I don't think he can claim the vat now, as obviously it was a fraudulent vat no also, so no vat can be claimed now is this also correct

sdv

Just put it as an Fradulent purchase of Oil expense ( or a miscellaneous a/c) through the books. This will prompt the accountant to ask questions..................

lorraine

thank you for your reply, but I do the tax return (se) on behalf of the client so will need to know what to do with putting it in the accounts, is it an alllowable business expense that can be used to reduce his tax reliability???

sdv

if you were doing a tax return for a market trader, or
a corner shop or
a mini supermarket

AND some it's stock got stolen
or an employee stole some cash from the till
or when goods received from supplier were short............................

How would you treat these in accounts (tax returns) ?

You must have come across these types of situtons before!

lorraine

ok, I would put it as a miscellaneous expense account, and mark it as fraudulent oil purchase where client has paid the fiunds but not received the goods.

Thank you for your reply.