Re: CashBack from Supplier VAT

On 23 Apr, 14:58, "Tim" <m...@xxxxxxx> wrote:
"Vass" wrote:
We buy from a wholesaler (WHS)
HP (the supplier to the WHS) have a promotion runnng, whereby we
send copies of our purchase invoces from WHS to HP for a cashback.
NOw, we have claimed the vat back on the WHS
invoice, but there is no docs from HP for the cashback,
HP claim we should account for our own tax liabilites
So, do I invoice HP for the cashback, knowing
full well HP will not process the invoice their end?
Can I self bill (in this case credit)?
I'm sure I'm in for the vat here, but Customs are clueless
too at the mo, will coe back to me in a week!
TIA
--
Vass

"PeterSaxton" wrote
You have to reduce your input tax. You don't
have to issue an invoice or a credit note.

http://www.hmrc.gov.uk/briefs/brief0807.htm

"Tim" wrote:
If the item was originally (say) £188.00 + £32.90 VAT = £220.90,
and you receive (say) £94 cashback -- paying £126.90 overall
-- then do you reduce the input tax by £16.45 or £14? In other
words, do you reclaim £16.45 input VAT or £18.90 input VAT?

The webpage referred to above says that "the cash back reduces
the taxable value of your purchase", and I understand that the
'taxable value' is the 'net' amount, ie originally £188 in my example
above. Thus the taxable value is reduced from £188 to £94,
the VAT on which would be £16.45 (which is also £16.45
less than the VAT on £188). But then the item will have been:
£110.45 + £16.45 VAT = £126.90 (overall), a VAT rate of
only 14.89% !!!

However, you will have paid £126.90 overall, which
you could consider to be: £108.00 + £18.90 VAT =
£126.90. Then you'd need to reclaim £18.90 input VAT...

"Troy Steadman" wrote

Oh dear.

"the taxable value is reduced from £188 to £94" ??? #### #@&!!! :)

Where did you study maths did you say?

Are you trying to suggest that £188 - £94 is not £94 ??
[I'll let you use a calculator if you don't believe me...]

I don't think you need to study maths at Cambridge to realise that it is!

"£188 - £94 is not £94" if you put "the taxable value is reduced
from" in front of it.

Either you are VAT registered, so taxable value is always net and the
payment is always gross, or you are unregisterered and the VAT is
disregarded.

Cambridge eh? Where do you stand on the question of creating "black
holes"?

.

Relevant Pages

  • Re: CashBack from Supplier VAT
    ... send copies of our purchase invoces from WHS to HP for a cashback. ... we have claimed the vat back on the WHS ... So, do I invoice HP for the cashback, knowing ...
    (uk.business.accountancy)
  • Re: CashBack from Supplier VAT
    ... send copies of our purchase invoces from WHS to HP for a cashback. ... we have claimed the vat back on the WHS ... So, do I invoice HP for the cashback, knowing ...
    (uk.business.accountancy)
  • Re: CashBack from Supplier VAT
    ... send copies of our purchase invoces from WHS to HP for a cashback. ... we have claimed the vat back on the WHS ... So, do I invoice HP for the cashback, knowing ...
    (uk.business.accountancy)
  • Re: CashBack from Supplier VAT
    ... we send copies of our purchase invoces from WHS to HP for a cashback. ... NOw, we have claimed the vat back on the WHS invoice, but there is no docs ... So, do I invoice HP for the cashback, knowing full well HP will not process ...
    (uk.business.accountancy)
  • Re: CashBack from Supplier VAT
    ... send copies of our purchase invoces from WHS to HP for a cashback. ... we have claimed the vat back on the WHS ... So, do I invoice HP for the cashback, knowing ...
    (uk.business.accountancy)