VAT Returns - Making Corrections

Mark 99
Mark 99 Registered Posts: 14 New contributor ?
Can anyone give me some guidance / encouragement? I have a client who often loses or mislays purchase invoices, meaning that I can not reclaim VAT on them.

If no VAT is reclaimable, does that then mean that the gross figure is treated as net expenditure? Or do I have to work out the net figure and lose the VAT element entirely?

If a purchase invoice comes to light later, the VAT can go into a subsequent quarter's returns, I think.

This must be quite a common situation with small businesses. What do people do?



  • JodieR
    JodieR Registered Posts: 1,002
    Firstly, if there's a missing receipt but you know the amount paid and you know the supplier is VAT registered and everything that they sell is standard rated and that if you had an inspection you could get a copy of the invoice then I would always claim the VAT.

    If it's a small item from somewhere like B&Q then again I would claim the VAT as it's obvious that it would have applied.

    If it's a large item which you would expect there to be VAT on but there's no receipt (say they bought a new computer from PC world) then I would explain to the client that if they get an inspection and they can't find the invoice/receipt then it may get dissallowed, but clients will usually come back with 'well I've got it SOMEWHERE' so I'd claim the VAT for them.

    If it's something which you don't know whether there would have been VAT to reclaim or not then I'd leave it until the invoice has been found, or on a few occasions I've contacted the supplier myself and got them to send copy invoices.

    VAT from previous quarters can be reclaimed so long as it's not more than 4 years old. So long as the 'error' doesn't amount to more than £10000 VAT you're fine to just include found receipts from previous quarters on the current return.

    And if you can't find a VAT receipt then you can claim the gross amount in the accounts, that's fine to do.

    I've had loads of routine VAT visits for my clients and they've never queried why there's a few small receipts missing, they usually pick out a few larger invoices and ask to see copies of them and then concentrate on the sales side. Once they asked to see a copy of a receipt for a van and it had been taken out of the file for some reason but we asked the dealer to fax through a copy and they were happy with that.
  • peaman
    peaman Registered Posts: 123 ? ? ?
    Agree totally with JodieR, don't be too rigid about needing a vat invoice.

    If you have good reason to believe that VAT is included, then claim it. If you are not sure don't claim it, if you subsequently find out that VAT was included, then claim in the next VAT quarter.

    I have also dealt with a number of VAT visits and they have never questioned a few missing receipts, especially if they are just general business expenses.

    If the missing invoice was for an expensive capital item, HMRC would most likely want to see the invoice, but presumably it wouldn't be too hard to obtain a copy.
  • T.C.
    T.C. Registered, Tutor Posts: 1,448
    And don't forget to "train" your client to keep all invoices/receipts! haha :thumbup1:
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