Please help, I'm having an arguement with a friend.
He is a lecturer and provides courses, he is VAT registered. If a course is cancelled he does not charge VAT on the cancellation fee as he claims no supply took place.
I disagree, I think VAT should be charged.
Any thoughts?
Cancellation of services
3 posts • Page 1 of 1
by vatexpert on Tue Dec 19, 2006 12:13 am
The VAT treatment of the payment received depends on the contractual terms agreed. If the payment is consideration for doing, or not doing, something it is taxable. However, if it is compensation for the cancellation and there is no direct link between the payment and anything given in return, then it is outside the scope of VAT.
Joe Wilkins
www.vatexpert.net
Joe Wilkins
www.vatexpert.net
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by King_Maker on Tue Dec 19, 2006 6:57 am
I believe your lecture friend is correct, as cancellation charges do not attract VAT.
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3 posts • Page 1 of 1
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