Hope someone can help with the following very complicated intercompany activity.
If you have Company A and Company B (Both separately Vat registered), (Both with the same Directors) and the same activity.
There are 2 scenarios I am a little uncertain about:
Firstly:
Company A receives a Purchase Invoice including VAT for expenses for both companies. Should company A recharge the expenses to company B?
Secondly:
Company A receives the money of tickets sales (including VAT) from the customers throught cardstream for both companies.
Does Company A include the total amount of the sales of the tickets in its VAT Return, then Company B issues an sales invoice to company A and company A pays the money back to company B.
Or company A does not include the ticket sales for company B in its VAT Return and just post the amount in the intercompany loan account and transfer the money to company B. Company B includes the sales in its VAT return.
Do consider a VAT Group Registration, so that such transactions are easier to do!
Where one company receives an invoice for the other, there are two options:
- ask the supplier to re-invoice correctly; or
- invoice from one company to the other as you indicate.
Where money is received by one company on behalf of the other, then the transfer of money does not attract VAT, as there is no 'supply.' Simply journal the transfer between the two companies.
