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SkyCaptain
November 13, 2019
Question

Not offsetting VAT owed with a VAT charged expense? Lost VAT Reciept

  • November 13, 2019
  • 1 reply
  • 0 views

I would like to know if it is possible to record an expense that did have VAT charged but for which I cannot find the VAT receipt but without it being used to offset any VAT I might ow.


I have an expense, I at some point much had a VAT receipt for it, however it is missing and my only copy was a physical one. Is it possible for it to still be recorded as a business expense but not have it recorded to offset my VAT I ow but instead just be classified as a non VAT purchase? Is that even legal? I am still learning!

1 reply

paul72
paul72
November 20, 2019

Hi SkyCaptain.

 

From a VAT perspective, if you don't intend to claim the VAT on the purchase, there's nothing to worry about.  From an Income Tax perspective, HMRC would expect to see some evidence that it was a business expense not a personal one.

 

Was it an expense paid by credit card or shown on a bank statement (in which case you have a record of the outgoing money) or was it cash?

HMRC would be more sceptical if it was cash.

 

You could enter into QBO using VAT Code NoVAT - this would not show on the VAT Return but would show on the ledger for Tax purposes.

You could enter into QBO using VAT Code 0% - this would show on the VAT return (box 7) but would not reclaim the VAT paid (zero to box 4).

 

Make a note in QBO to remind you that the receipt is missing but the amount tallies with credit card / bank statement on the date.

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