Is VAT a Partnership Tax Expense?

[PollyRed]

Hi

This is the first time I have filled out my Partnership Form being VAT Registered.

Can I claim VAT payments as an expense anywhere in the Partnership Tax Return Form?

Thanks in advance for any help given ;-)

[James Smith]

Er dont take this the wrong way but it is possible that by asking this question this may suggest you fundamentally misunderstand what VAT is.

VAT is just a tax you are collecting on behalf of the government. As such your business's income is all net of VAT - not the figure that is physically paid on your invoices. That is to say your accounts should all be stated pre VAT, so you cant "claim it as an expense" as its not an expense of your business unless you are usingthe VAT flat rate when it gets a bit more involved to explain what happens.

Make sure you understand what you are doing here, if you don't understand the basic principles its easy to make a hash of it! There is a big chunk in my book about how to draw up basic accounts for VAT registered businesses which might well help you in this instance.

hope that helps, also hope I have got the wrong end of the stick as you would struggle to do your VAT returns and keep your accounts if you don't really understand the fundamentals.

Regards,

[PollyRed]

Hi James, its not quite as bad as it seems lol. I was trying to prove a point to my business partner. Your detailed help is much appreciated, thanks

[James Smith]

Phew!

Thought you might be in the brown creek there with just your bare hands.

I see a lot of hard working small biz owners get very stressed and worried about tax and most of it is just a case of a bit of basic knowledge, once people know how to do it you can see the relief!