I just wanted to verify something, if anybody out there can help.
Due to a huge error with an electricity supplier we have just received a refund of £29k. The vat on the original invoices has previously been reclaimed as per usual practice, Am I correct to think that we need to repay the relevant vat on the refund we've just received? This was all prior to the vat rate change so I'm guessing I would have to repay 17.5% of the refund? Any verification would be gratefully received.
Yes I believe you will have to repay the VAT on the refund. If it was me I would write to the VAT office to explain. If the VAT is over £2000 you cannot corect the VAT on your next VAT return. Hope this helps.
I agree that the VAT previously reclaimed needs to be paid back. However from last year errors up to £10,000 can now be adjusted on the VAT return, so based on a refund of £29K you should be fine just adjusting for it on your next return.
I agree the vat needs to be paid back if it was claimed in the first place.
What i'm a bit confussed about is, is it to be recorded as an error? As it isn't an ommission or error on your part, the mistake was with the utility company who you overpaid and they have refunded the difference.
This is not a VAT error so doesn't need reporting the the VATman. Just make the adjustments on your next VAT 100 workings before completing the VAT100. Be sure to show the adjustment clearly on your workings so that if you get a VAT inspection, the Inspector can see clearly that you have made the adjustment. Also, because the correction is current, any VAT refunded by the utility company should be at 15%. Please also note that the requirement to report any VAT errors over £2000 has been cancelled, you only need to report if the error is in excess of £10,000.
