UK Reclaiming VAT on costs billed to a third party

[Zach C]

Hi all,

I have seen a few questions about this issue online, none that quite match up to this, however i'm wondering if anyone can give me a resolution.

Company A recently acquired some software, Company B paid it in their behalf however it was invoiced to Company A, its my understanding that as the invoice is not billed to Company B they cannot reclaim the VAT on it.

Is there a way around this? perhaps with some inter-company invoicing? Or is the VAT element completely irrecoverable by Company B?

Many thanks

Zach

 

[Julia Satin]

Hi,
If the software was intended for the company A and it is the end user of the software then company B cannot recover the VAT on the software.
What is the problem? Why should B recover VAT and not company A?
If A is not registered for VAT then the VAT amount will be part of the costs of the software on the BS of the company A.
But if A is registered then I don't see any problems. A should reimburse the money paid by B and then it can reclaim the input VAT on the software.