Unpaid VAT invoice - advice please

[Alan @ BroomeAffinity]

I've already paid it, so it's too late now, isn't it?

Its too late to do much about it but I'd look carefully at your accountant as he seems to have given you bad advice.

[ASB]

1) you should only be declaring it it's vat return when it is ISSUED if you are using accrual accounting for VAT.

2) You can correct errors on your next vat return if < 2k (check HMRC to ensure that figure is correct).

3) If they don't pay it and it becomes a bad debt then you can write it off anyway - but this does mean you've done all the chasing etc needed.

[blacjac]

I would phone HMRC and tell them that one of your suppliers is refusing to pay VAT, however this was not picked up by your accounts team until after the VAT return was submitted.

I am sure they would be very helpfull when they find out someone is witholding VAT

[Sockpuppet]

With respect, your accountant is wrong. You categorically do not have to declare VAT on your VAT return until it is paid. I suggest you take this matter up with your accountant as a matter of urgency.

Well its half of one 6 of the other.

Technically you're right but also wrong.

If you are on cash accounting you use payment date for vat stuff.
If you are not you use invoice date.


No rules on which to use just decide one and stick with it. If his accountant chose to use invoice date then his accountant is right in this respect. If his accountant chose payment date (unlikely considering its paid) then he is wrong.

[Alan @ BroomeAffinity]

Well its half of one 6 of the other.

Technically you're right but also wrong.

If you are on cash accounting you use payment date for vat stuff.
If you are not you use invoice date.


No rules on which to use just decide one and stick with it. If his accountant chose to use invoice date then his accountant is right in this respect. If his accountant chose payment date (unlikely considering its paid) then he is wrong.

Its not for the accountant to choose. The accountant should look at the parameters and make suggestions as to the most appropriate course of action. The contractor should make a decision based on that advice.

[monkeygeorge]

I wasn't offered a choice, I just do what I'm told!

[Alan @ BroomeAffinity]

Precisely my point. And on the face of it you've been told to do the wrong thing.