How do I deal with claiming VAT on in-person transactions. (in this case, I'm the buyer)

[ThatDevAaron]

Hi, so I want to make some purchases at a wholesale house in my area, how do I go about claiming VAT, should I get a invoice specifically stating VAT info, or a physical receipt from the till

Thanks a lot, this may seem pretty straightforward, but I've been pondering this for a while...

 

[Nathanto]

Hi, so I want to make some purchases at a wholesale house in my area, how do I go about claiming VAT, should I get a invoice specifically stating VAT info, or a physical receipt from the till

A wholesaler will almost certainly supply a VAT receipt/invoice by default but if not then you simply ask them for one. While ideally you should always have a proper VAT receipt/invoice, it's not actually 100% mandatory to reclaim VAT.

As long as you are VAT registered and the products are purely for business use then evidence of the goods purchased and who from would normally be sufficient to satisfy HMRC even without a proper VAT breakdown. (Of course in the real world the chance of anyone checking is slim to say the least, unless you are newly VAT registered or the amounts involved are significantly different from your typical quarterly VAT returns.)

 

[DontAsk]

Hi, so I want to make some purchases at a wholesale house in my area, how do I go about claiming VAT, should I get a invoice specifically stating VAT info, or a physical receipt from the till

Thanks a lot, this may seem pretty straightforward, but I've been pondering this for a while...

You obviously need to be VAT registered and you don't claim VAT. You fill in a VAT return and offset input and output VAT to work out what you owe HMRC, or vice-versa.

I'm not sure if you are you talking about a personal purchase and then reclaiming from the company, in which case I understand the hesitancy, or a purchase in the company name, in which case it's VAT 101 level knowledge.

 

[MyAccountantOnline]

Hi, so I want to make some purchases at a wholesale house in my area, how do I go about claiming VAT, should I get a invoice specifically stating VAT info, or a physical receipt from the till

Thanks a lot, this may seem pretty straightforward, but I've been pondering this for a while...

Have a read here

 

[ThatDevAaron]

You obviously need to be VAT registered and you don't claim VAT. You fill in a VAT return and offset input and output VAT to work out what you owe HMRC, or vice-versa.

I'm not sure if you are you talking about a personal purchase and then reclaiming from the company, in which case I understand the hesitancy, or a purchase in the company name, in which case it's VAT 101 level knowledge.

We are VAT registered, and I'm trying to claim VAT back (through a return) for items the COMPANY has paid for (20% VAT markup adds on quite a lot, especially for tech-items).

We're NOT AT ALL, talking about personal purchases.

 

[ThatDevAaron]

A wholesaler will almost certainly supply a VAT receipt/invoice by default but if not then you simply ask them for one. While ideally you should always have a proper VAT receipt/invoice, it's not actually 100% mandatory to reclaim VAT.

As long as you are VAT registered and the products are purely for business use then evidence of the goods purchased and who from would normally be sufficient to satisfy HMRC even without a proper VAT breakdown. (Of course in the real world the chance of anyone checking is slim to say the least, unless you are newly VAT registered or the amounts involved are significantly different from your typical quarterly VAT returns.)

I see, I thought VAT Invoice would be required at all times - mainly cause, this wholesale market employs people who aren't really the most business savvy, so when I ask for invoices/receipts, they give me very shitty ones/till receipts/hand-written receipts.

Do I need to heavily encourage them for a proper invoice? If not, and having proof of purchase+the items purchased is good enough, I'd love someone else to confirm this before we actually starting doing this lol

 

[Bobbo]

I see, I thought VAT Invoice would be required at all times - mainly cause, this wholesale market employs people who aren't really the most business savvy, so when I ask for invoices/receipts, they give me very shitty ones/till receipts/hand-written receipts.

Do I need to heavily encourage them for a proper invoice? If not, and having proof of purchase+the items purchased is good enough, I'd love someone else to confirm this before we actually starting doing this lol

If they and you are VAT registered, they are required to provide a VAT invoice when supplying VATable items to you.

 

[DontAsk]

so when I ask for invoices/receipts, they give me very shitty ones/till receipts/hand-written receipts.

Assuming they are actually VAT registered then they are required to issue a VAT receipt. See https://www.gov.uk/guidance/record-keeping-for-vat-notice-70021 section 3.1 "if you’re VAT-registered, you must issue a VAT invoice whenever you supply standard rate or reduced rate goods or services to another VAT-registered person. "

It's slightly different for retailers.

 

[ThatDevAaron]

Assuming they are actually VAT registered then they are required to issue a VAT receipt. See https://www.gov.uk/guidance/record-keeping-for-vat-notice-70021 section 3.1 "if you’re VAT-registered, you must issue a VAT invoice whenever you supply standard rate or reduced rate goods or services to another VAT-registered person. "

It's slightly different for retailers.

The thing is, this wholesale house is massive, a bunch of wholesalers, all of whom are VAT registered - but the people working there don't know what they're doing (they're fresh indians who probably aren't even legal to work ), but its actually a gem for my business, aside from the fact I can't deduct VAT right now....

 

[Nathanto]

I see, I thought VAT Invoice would be required at all times - mainly cause, this wholesale market employs people who aren't really the most business savvy, so when I ask for invoices/receipts, they give me very shitty ones/till receipts/hand-written receipts.

Do I need to heavily encourage them for a proper invoice? If not, and having proof of purchase+the items purchased is good enough, I'd love someone else to confirm this before we actually starting doing this lol

Assuming they are VAT registered then they have a legal obligation to provide a VAT receipt as per Section 13 of the The Value Added Tax Regulations 1995. I would certainly insist on a proper VAT receipt, it doesn't matter whether it's handwritten but does need to contain their VAT number, company details, date and amount of VAT charged.

And that should be your starting point, are they actually VAT registered? Don't assume but check here. If you think they could be a bit iffy then I would also recommend you check their VAT registration regularly; if they end up being de-registered for VAT but keep issuing VAT invoices which you use to reclaim VAT then HMRC do have the power to claw back any repayments from you.

If you are confident they are VAT registered then as said previously you can claim the VAT back and if challenged by HMRC you can fall back on The Value Added Tax Regulations 1995 s 29(2) which states "a claimant shall hold or provide such other evidence of the charge to VAT as the Commissioners may direct".

So, although it's not a guarantee, as long as you have persuasive evidence that VAT was charged and paid for goods entirely for business use then you should be fine.

 

[HFE Signs]

It's quite simple, you ask for a receipt, if it has a vat number you can claim it back (assuming you are vat registered yourself), if not you can't.

 

[ThatDevAaron]

It's quite simple, you ask for a receipt, if it has a vat number you can claim it back (assuming you are vat registered yourself), if not you can't.

ima need someone here to lmk if thats true

 

[Scalloway]

Less detailed VAT invoices:

he value of the supply, including tax, is £250 or less;
if the registered person is based in Northern Ireland, the supply is not to a person from another EU member state.
the invoice does not include any exempt supplies.

A less detailed VAT invoice need contain only the following particulars:

the name, address and registration number of the retailer;
the time of the supply;
a description sufficient to identify the goods or services supplied;
the total amount payable including VAT;
for each rate of VAT chargeable, the gross amount payable including VAT; and
the VAT rate applicable.

Paragraph 16.6.2 of VAT guide (VAT Notice 700) - GOV.UK provides a useful summary here.

VATREC16042 - Other Invoicing arrangements for particular businesses: Retailers: Less detailed VAT invoices - HMRC internal manual - GOV.UK

www.gov.uk

 

[HFE Signs]

ima need someone here to lmk if thats true

Sorry I don't understand this?

 

[UK Contractor Accountant]

Sorry I don't understand this?

No problem I will translate for you: I think it was in french

"Please may someone let me know if that is true"

 

[MyAccountantOnline]

The thing is, this wholesale house is massive, a bunch of wholesalers, all of whom are VAT registered - but the people working there don't know what they're doing (they're fresh indians who probably aren't even legal to work ), but its actually a gem for my business, aside from the fact I can't deduct VAT right now....

How do you know they are all definitely VAT registered?

 

[MyAccountantOnline]

ima need someone here to lmk if thats true

In HMRC's guidance they state - 'You must also have valid VAT invoices.'

I always advise clients to obtain and keep VAT invoices but HMRC do have discretion to use alternative evidence have a read here

 

[DontAsk]

Less detailed VAT invoices:

he value of the supply, including tax, is £250 or less;

That's for retail sales. B2B always requires a VAT notice.

Seethe link I posted yesterday.

 

[Paul Kelly ICHYB]

I'm trying to claim VAT back

You are not claiming anything back - this is the greatest misunderstanding of VAT for startups and new VAT businesses!

You are offsetting VAT on purchases against VAT on sales (remember, you add VAT to all applicable products, which is most!). If you paid out more VAT than you collected, you can get a refund - this can be the case at the early stages of a business, however, as you sell more, you will end up paying VAT to HMRC more often.