Sorry I haven't posted in a while but wondered if you could help me with a small query.
My client is in the process of buying land, and changing to Limited, and has lots of invoices relating to professional/legal fees that we can't claim the VAT, yet (until they become the LTD company). Do I enter these as T0 or T9. Or does it not matter.
Just a couple of Qs - why do you consider the VAT will be re-claimable in the Ltd company?
If your client buys land in his personal name and then transfers it into his company - that will increase his costs considerably in a few different areas (fees/tax). Can this not be transacted through the Limited to start with to save on that?
When you say T0 or T9 might be better to explain what you mean as not everyone uses the same software.
You dont say what VAT scheme they are on.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Just a couple of Qs - why do you consider the VAT will be re-claimable in the Ltd company?
If your client buys land in his personal name and then transfers it into his company - that will increase his costs considerably in a few different areas (fees/tax). Can this not be transacted through the Limited to start with to save on that?
When you say T0 or T9 might be better to explain what you mean as not everyone uses the same software.
You dont say what VAT scheme they are on.
It's not me considering this - it's all being dealt with by solicitors and tax advisors who will tell us what can and can't be claimed and when, however the current company has to pay the invoices until the transfer.
It's a partnership that has been trading for about 40+ years that is transferring to Limited. Complicated process.
It's not me considering this - it's all being dealt with by solicitors and tax advisors who will tell us what can and can't be claimed and when, however the current company has to pay the invoices until the transfer.
It's a partnership that has been trading for about 40+ years that is transferring to Limited. Complicated process.
I'm using Sage. They are on Standard VAT.
Welcome back - hope you will be here more often again! Had noticed you had gone!
Anyway - yes these things can be complicated especially if you dont get the info you need to even decide on the tax code right, which is increasingly important especially under MTD.
So - just a couple more Qs (sorry you know me, but there are always reasons for them, not trying to be difficult).
What is the reason for not claiming the VAT back? Is it because this bill is being paid for on behalf of the Limited company as they have no bank account yet? Or are the invoices genuinely addressed to the partnership (confusion when you mention company here)? Is it because they are buying the land under the partnership and have not opted to tax under the partnership?What are they doing with said land once acquired? Renting it out? Building on it? All is important to get to the big question of does the payment constitute consider for supply. If it hits the latter, it needs to be reported in box 7 (TO in sage). If not then out of scope.
I don't know all the details re land etc. However I'm pretty certain that it's because they are paying on behalf of the LTD company. There's a complication with Entreprenuer tax that means everything has to be transferred on a particular day - on that same day the current bank account is shut down and the limited one opened. The LTD one cannot be opened before.
ETA: Therefore I'm assuming its T9 so outside the scope but I didn't want to assume.
-- Edited by Sammy76 on Thursday 5th of September 2019 01:20:52 PM
Thank you. Even though I thought I knew what I needed to do, I just need that confirmation. I'll try not to be a stranger but work/life means I'm not getting online as much.
