VAT on intercompany costs
truecockney
Feels At HomeRegistered Posts: 93
I have a question that I hope someone can clarify.
I have an instance whereby a UK company incurs a charge that needs to be split across multiple subsidiaries (each is in a different country so no VAT group). VAT has been charged on the full invoice. When transferring relevant costs to each entity via intercompany journals, does the VAT also need to transferred as if this is non-reclaimable, or can the VAT be fully reclaimed in the UK?
This relates to a final settlement of contract in the UK entities name.
I have an instance whereby a UK company incurs a charge that needs to be split across multiple subsidiaries (each is in a different country so no VAT group). VAT has been charged on the full invoice. When transferring relevant costs to each entity via intercompany journals, does the VAT also need to transferred as if this is non-reclaimable, or can the VAT be fully reclaimed in the UK?
This relates to a final settlement of contract in the UK entities name.
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Best Answer
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i would like to re phrase your question the way i understood. and answer.
an expense invoice received by uk company for £300+vat=£360.
answer
uk company enter the invoice as usal and claim all £60 vat in its books.
then raise invoice £100 each to other two companies without vat.
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Many thanks.0