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A trader omitted to register for VAT for eight years. He has now done so and is seeking to recover the VAT liability from his one VAT-registered customer. Consideration is given as to when the four-year limit for the recovery of VAT starts in a case such as this: is it the date of supply or the date of the VAT invoice?
I have recently taken on a new client who was late in registering for VAT by eight years. This aspect has now been resolved and he has completed and paid the liability on an eight-year VAT return.
Most of his business has been through one customer so he has attempted to recover VAT from this customer by issuing a VAT-only invoice for £70 000 covering the past eight years of sales.
However the customer has said that he can only accept an invoice for the past four years because the first four are out of time under the error adjustment rules which are time-capped at four years. This does not seem a fair outcome to me but I can see his logic.
Can readers offer information or advice?
Query 18 180 – Timing Man
Reply from Gardener
This is “glass half full”...
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