Treatment of VAT in a liquidation

[mloc]

My company went into liquidation.
The liquidator was able to secure a sale of the liquidated business and it will generate a small surplus when all realised revenues and costs are offset. I will receive this surplus as a shareholder.

Within the figures, Revenue are owed €10k in VAT.
The liquidators bill has now landed and his costs will include about €14k in VAT

When the figures are being finalised, does this mean that the business will receive a VAT refund of €4k from Revenue

OR

Does it mean the business will pay out €10k to Revenue and a further €14k to the liquidator in VAT?

I've asked the liquidator this question but answers have been shortcoming?

 

[callybags]

Will the surplus be after the liquidator's expenses (net of VAT) and the payment of the outstanding VAT bill?

If so, then I would have thought the liquidator will be paid his full bill including VAT and a final VAT return will be submitted to Revenue, where the 14k will be offset against the 10k owed, giving rise to a 4k refund.

It is possible that a separate return will have to be made under "XYZ Co. Limited (In Liquidation)" to claim the refund, but the net outcome would be the same.

Effectively the 14k VAT on the liquidator's bill will not affect your final situation, as it will be paid over to the liquidator and reclaimed from Revenue.

Please bear in mind that I am not an expert in liquidations.

 

[mloc]

Hi Callybags, Yes the surplus is after the liquidators expenses (net of VAT) and the payment of the o/s VAT bill. (and all other creditor bills)

If I understand you correctly, in the scenario above, if all other creditors have been paid what they are due and there is still a surplus, the 4k refund will find it's way back to the shareholder?