Re: CashBack from Supplier VAT

"Tim" wrote:
Will you answer the question - in the example I gave earlier, what
amount of input tax do you think should be claimed, and why?

"Troy Steadman" wrote
You can reclaim n / (100+n) of £94 where n is the original
VAT % rate on the whole of the purchase including the discount.
We don't know what n is so I can't answer your question.

Yes we do - it was 17.5% (it was my example, remember!).
So you are saying that having paid £188+VAT = £220.90 initially,
and reclaiming £32.90 VAT initially, then receiving a £94 cashback,
you then disclaim (not "reclaim"!) 17.5/117.5 of £94 = £14,
so you will have effectively claimed £18.90 input tax overall.

The taxable value will therefore have reduced from £188
to £108, a reduction of £80. So the cashback of £94 did
*not* reduce the taxable value; only £80 of it did. You
are therefore saying that the HMRC webpage is incorrect!


.

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    ... VAT % rate on the whole of the purchase including the discount. ... the whole input tax relating to the whole original purchase price. ...
    (uk.business.accountancy)
  • Re: CashBack from Supplier VAT
    ... VAT % rate on the whole of the purchase including the discount. ... the whole input tax relating to the whole original purchase price. ...
    (uk.business.accountancy)