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Where Taxpayers and Advisers Meet

Can I deduct VAT from my self assesment?

ash213
Posts: 16
Joined: Fri Sep 16, 2011 4:25 pm

Can I deduct VAT from my self assesment?

Postby ash213 » Sun Dec 20, 2015 8:45 pm

Hi

I know this may sound confusing, but I'll try my best.

I pay VAT quarterly.

When I do my self assessment I work out all the figures inclusive of VAT as if I was not registered for VAT. (Yes people will probably bash me for this)

So my accounts have nothing to do with VAT on them at present, so my question is, can I then put an expense on my self assessment for the VAT I have paid HMRC for that tax year? As its a heft sum, this would be beneficial if I could.

Please let me know

Thanks

section 44
Posts: 4468
Joined: Thu Oct 30, 2008 12:47 pm

Re: Can I deduct VAT from my self assesment?

Postby section 44 » Mon Dec 21, 2015 10:23 am

VAT is only deductible to the extent that it is irrecoverable, ie where it is a cost to the business

ash213
Posts: 16
Joined: Fri Sep 16, 2011 4:25 pm

Re: Can I deduct VAT from my self assesment?

Postby ash213 » Mon Dec 21, 2015 12:25 pm

Hi

thanks for the reply, could you explain that in a little more detail please as I dont fully understand

Thanks

section 44
Posts: 4468
Joined: Thu Oct 30, 2008 12:47 pm

Re: Can I deduct VAT from my self assesment?

Postby section 44 » Mon Dec 21, 2015 1:43 pm

So far as VAT is concerned, your profits are:

1. Your sales (exclusive of VAT)

Less:

2. Your expenses (inclusive of irrecoverable VAT only)

ash213
Posts: 16
Joined: Fri Sep 16, 2011 4:25 pm

Re: Can I deduct VAT from my self assesment?

Postby ash213 » Mon Dec 21, 2015 10:14 pm

Hi

thanks for reply, but still unsure what Your expenses (inclusive of irrecoverable VAT only) exactly means.

could you explain please?

thanks

nikkisizer
Posts: 342
Joined: Fri Nov 04, 2011 5:26 pm
Contact:

Re: Can I deduct VAT from my self assesment?

Postby nikkisizer » Tue Dec 22, 2015 8:04 am

Hi ash213,

If you cannot claim the VAT back paid on certain purchases then this is allowable as an expense so you would deduct the gross amount not the VAT exclusive amount.
Kind regards,

Nikki Sizer

Sizer & Co Accountants
nikki@sizeraccountants.com
[url]http://www.sizeraccountants.com[/url]

Birmingham - London - Manchester - Leeds

robbob
Posts: 2841
Joined: Wed Aug 06, 2008 4:01 pm

Re: Can I deduct VAT from my self assesment?

Postby robbob » Tue Dec 22, 2015 10:11 am

When I do my self assessment I work out all the figures inclusive of VAT as if I was not registered for VAT. (Yes people will probably bash me for this)
can I then put an expense on my self assessment for the VAT I have paid HMRC for that tax year?

Yes you can and should claim overall due vat as an expense - i am presuming sales are inclusive of vat charged so they will be higher than would be the case if you charged same net sum (excl vat) without being vat registered.

hmrc specific advise is as follows

https://www.gov.uk/government/uploads/s ... s-2015.pdf

With VAT
If you include VAT, either:
• put your net VAT payment to us as an expense
in box 30, or
• put any net repayment you received from us in box 16.
If either payment includes VAT on capital items, you need
to give us the details in box 103 ‘Any other information’.
Include the VAT that is not recoverable when you work
out the capital allowances due on these items
(boxes 49 to 59).

Note it is very easy to get inconsistent results when you use this method eg with timing issues in relation to when vat is paid - for that reason i would never recommend using this method if possible - as you work out the vat due in the first place i would recommend swapping to doing everything net of vat (where vat has been accounted for or claimed back) - if you are on flat rate it is somewhat more complicated you would use gross vat inclusive sales less flat rate vat accounted for on those sales and expenses including vat where no vat has been reclaimed or net of vat if vat had been reclaimed (eg assets and pre-vat services)

ash213
Posts: 16
Joined: Fri Sep 16, 2011 4:25 pm

Re: Can I deduct VAT from my self assesment?

Postby ash213 » Tue Dec 22, 2015 11:22 am

Hi

things are becoming a lot more clearer now, however still unsure about my expenses(purchases).

right now my expenses(purchases) on my final accounts include VAT, so they are the gross amount. This is the VAT I have reclaimed on my purchases.

For example, if my total stock purchases that I have reclaimed VAT on, are £50,000, I have put down £50,000 as the total amount for that specific purchase. That obviously includes the VAT of £8333.33.

Is this right or wrong?

Please could some one clarify,

Thanks

section 44
Posts: 4468
Joined: Thu Oct 30, 2008 12:47 pm

Re: Can I deduct VAT from my self assesment?

Postby section 44 » Tue Dec 22, 2015 11:39 am

Is this right or wrong?
wrong

as I said:
2. Your expenses (inclusive of irrecoverable VAT only)

ash213
Posts: 16
Joined: Fri Sep 16, 2011 4:25 pm

Re: Can I deduct VAT from my self assesment?

Postby ash213 » Tue Dec 22, 2015 11:58 am

What is classed as irrecoverable VAT?

Please could you clarify that please.

So going ahead, I can

- put down my income inclusive of VAT
- put down my expenses inclusive of irrecoverable VAT only
- and I can put down my VAT payments as an expense.


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