Overclaimed input tax

The company Gdeco built new homes. The director W dealt with invoicing record keeping and submitting VAT returns. 

 

At a VAT visit the HMRC officer was concerned about two matters.

 

First an invoice to Gdeco for construction work from an associated company (Oakstone Homes Ltd) also controlled by W charged VAT of £4 560 although it should have been zero rated. Gdeco claimed the input tax in its VAT return although the other company had not accounted for the output tax because at the time of the visit its VAT return was outstanding. The officer disallowed the claim.

 

Second Gdeco claimed input tax of £1 699 on the purchase of a photo booth. This had been bought in April 2014...