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What is the norm ,when asked for invoice ?

  • 11-04-2008 10:55pm
    #1
    311
    Closed Accounts Posts: 5,332 ✭✭✭


    Hello ,I've a question regarding payment for service to a company.

    Basically ,if a company is offering payment by cheque on receipt of invoice ,
    Is it taken for granted that the invoice would include VAT?

    If so and the invoice does not include vat ,is the company obliged to pay by cheque ,or do they just pay the Net amount.


Comments

  • #2
    bk1
    Closed Accounts Posts: 9 ✭bk1


    Hi, firstly depends if you are registered for VAT? If you are, then you must charge VAT to your customer. If they are also registered for VAT, then they can claim this VAT back. Usually you would quote your price and let the client know if you will be charging VAT.

    For a company/ person to reclaim VAT, they must have received a valid VAT invoice. They will obviously only pay whatever is charged on the invoice.
    Hope this helps


  • #3
    311
    Closed Accounts Posts: 5,332 ✭✭✭311


    Thanks for the reply ,I'm actually vat registered. I was always under the impression if payment is ever made to someone with a company cheque.
    Then the invoice should have vat included and if it doesn't ,then the person sending the invoice would only get the net amount.
    So the company would still be paying what they normally do ,as they would normally claim the vat back.

    Personally ,I won't ever pay for anything without a vat invoice.


  • #4
    bk1
    Closed Accounts Posts: 9 ✭bk1


    Hi, how an invoice is paid for has no connection to whether VAT is charged or not. Simply, if you are registered for VAT then you must charge VAT on your invoice. If your client is registered for VAT they can reclaim the VAT back but they will still pay you the net amount plus VAT as you have to pass the VAT onto the Revenue.

    If they are not registered for VAT then it's hard luck for them as they will have to suffer the VAT and cannot reclaim it back. So in summary if you are all registered for VAT then you or your client are no worse off.


  • #5
    311
    Closed Accounts Posts: 5,332 ✭✭✭311


    Sorry about this ,I'm looking at this differently.

    I'm not concerned about myself ,this is about someone who will invoice a company for payment and are not registered for vat.

    If an invoice is given by a person who is not vat registered ,to a company who is. Is the company intitled to deduct an amount from the invoice themselves ,to account for the person not being vat registered?


  • #6
    bk1
    Closed Accounts Posts: 9 ✭bk1


    Ok, if a person is not VAT registered, then they will not include VAT on their invoice. For the client receiving the invoice, if there is no VAT on the invoice, then there is nothing to reclaim. They can't claim VAT that is not charged. Is this a bit clearer?


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  • #7
    311
    Closed Accounts Posts: 5,332 ✭✭✭311


    I understand all that ,it's the question of whether a vat registered company is entitled to deduct an amount from the invoice ,as they would normally do by claiming vat.

    Is the company obliged to pay the invoicer ,if the service is normally tax paying ,i.e professional service.


  • #8
    bk1
    Closed Accounts Posts: 9 ✭bk1


    One of the conditions for reclaiming VAT is that the person claiming must have received a valid VAT invoice. Now, if the invoice received has no VAT on it, it is not a valid VAT invoice and they cannot claim any VAT back under any circumstances. Even if the invoice is for a service they would normally pay VAT on. It all comes from the person invoicing - if VAT registered they can issue an invoice with VAT on it, if not VAT registered they will issue the invoice without VAT. The receiving company cannot claim VAT that wasn't charged in the first place regardless of whether they would pay VAT for example to another company that is VAT registered for the same type of service.


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