Hi I have received the following query from a client i do just the day to day bookkeeping and VAT returns for. They have an accountant for their end of year partnership accounts. I know how to process VAT but this doesnt sound right to me and certainly isnt the way my husband would conduct his building business. Please could someone point me in the right direction on how to go back to them? I really don't want to go back sounding unsure!
Thank you in advance
Hi
I am after information a property developer Steve Sparks who we do work fore has asked us to do a job on a property that is changing from commercial to residential so the vat is 5% but he has bought the materials on our account and paid for it @ 20% vat but he want us to do the job and charge for labour and materials @ 5% so he gets back he's 15% vat that he paid over for materials. He said he put the material invoice in our name so we can claim the vat back, but I was thinking that there will be no withdraw from our account for this amount so it will look like we are claiming for something we have not paid for. What do we do.
Your client reimburses Steve in full for the materials, (payment from the bank), taking back the copy of the invoice. You client then claims the 20% VAT on that invoice. The invoice is in your client's name so this shouldnt be an issue.
Do make sure there is something is writing to confirm the conversion work is eligible for 5%. I have just seen a letter from HMRC challenging a small contractor to provide exactly this information.
