Cancellation of deposits – VAT reclaim - June 2009
You take a deposit from your customer but they later cancel their order. You retain the deposit but what can you do about the VAT you have already accounted for?
Previously, the VAT charged still had to be paid to HMRC. However following a case in the European Court of Justice, forfeited deposits are no longer subject to VAT as there has not been a supply of goods or services.
If you have been accounting for VAT on forfeited deposits you may be entitled to go back and reclaim the VAT.
To find out more information, please email Barry at: barrye@wellsassociates.com
These notes are for guidance only and no liability attaches to this firm or partners due to losses incurred by you in relation to the reliance on the content. It has been written in general terms and is intended as a guide only. Professional advice should be sought regarding your specific situation and the application of the above.