input VAT

Options
sarva
sarva Registered Posts: 13 New contributor 🐸
Can anyone who has registered for VAT claim input VAT from an invoice which is supplied by a non registered person/business?.

Comments

  • anniem
    anniem Registered Posts: 1,326 Beyond epic contributor 🧙‍♂️
    Options
    No. A non-registered person is not entitled to claim VAT on their invoice, therefore there is no VAT to claim back.
    FMAAT - AAT Licensed Member in Practice - Pewsey, Wiltshire
  • Monsoon
    Monsoon Registered Posts: 4,071 Beyond epic contributor 🧙‍♂️
    Options
    Also, if a non-VAT registered person is showing VAT on their invoice, they would be in trouble if the VAT man found out!
  • truecockney
    truecockney Registered Posts: 94 Regular contributor ⭐
    Options
    I would advise if they are receiving bills from non-VAT registered businesses, only pay the net as you are not able to claim the VAT back that should not have been billed in the first place and inform them of that.

    The businesses VAT number should be present on all invoices a company issues. If you have doubts of the legitimacy, contact them for their VAT number direct, asking for a reissue at the same time, and check the records with the EC database.

    http://ec.europa.eu/taxation_customs/vies/vieshome.do
  • sdv
    sdv Registered Posts: 585 Epic contributor 🐘
    Options
    sarva wrote: »
    Can anyone who has registered for VAT claim input VAT from an invoice which is supplied by a non registered person/business?.

    A non-registered supplier can not charge vat on their invoices, therefore there is no vat input tax to be claimed?

    Has a non-registered person issued you/your client with a vat invoice? Is there a vat registration quoted on that invoice?
  • Paul C
    Paul C Registered Posts: 193 Dedicated contributor 🦉
    Options
    "only pay the net as you are not able to claim the VAT back that should not have been billed in the first place and inform them of that."

    my VAT knowledge is fairly basic so aplogies for asking, but is this correct? I thought the last person in the VAT chain needs to pay over the VAT as everyone has claimed net input and output VAT. If I am not registered and can not claim back or charge VAT then I should be paying VAT on my purchases otherwise the tax man has missed out?
  • sdv
    sdv Registered Posts: 585 Epic contributor 🐘
    Options
    Paul C wrote: »
    .................I thought the last person in the VAT chain needs to pay over the VAT as everyone has claimed net input and output VAT.

    The unregistered person for vat will be the last person to have paid vat on his purchases.
    the supplier will account that vat to HMCE.

    Because he is unable to re-claim, the input vat tax become past of his purchase costs.

    When he sells the purchased item, he can not charge vat on that. therefore he does not have to account any vat to HMCE and the difference between the selling price and the full purchase price (including vat) is his profit.
  • A-Vic
    A-Vic Registered Posts: 6,970 Beyond epic contributor 🧙‍♂️
    Options
    Sorry am a little confused here has the non-registered business charged VAT? in that case they will have already paid the vat on the invoice but unfortunatley will not be able to re-claim it because as far as HMRC are concerned the company does not have a VAT registered number.

    If i have read this correctly they have been defrauded by the company by paying the extra and they will lose out.
  • sarva
    sarva Registered Posts: 13 New contributor 🐸
    Options
    Thank you for all. I alredy knew how a non-Vat registred person deal with their accounts. But hear the supplier is non registered person and buyer is Vat registered.
    Truecockney's reply is more helpful to understand this matter. Vat registered person pay the net of VAT( different between purchase price and selling price). So how I can show that invoice in the books?.
  • Gem7321
    Gem7321 Registered Posts: 1,438 Beyond epic contributor 🧙‍♂️
    Options
    A non-VAT registered business can't show VAT on an invoice so there is no VAT for your client, the buyer, to claim.

    So your double entry will be (entire invoice amount because there is no VAT):
    DR Purchases
    CR Bank
    If a cash purchase

    OR

    DR Purchases
    CR Creditors
    If a credit purchase
Privacy Policy