Hi, can anyone help with the query below?
A vat registered person buys a commercial jeep say €35k nett having reclaimed the VAT. 18 months later the jeep is stolen and the insurance company pays out say €27k. The registered person then goes and buys a replacement commercial jeep for €25k nett. Assume VAT at 21.50% and ignore capital allowances.
Question 1. Does the €27k insurance proceeds constitute a sale i.e does he have to hand over 21.50% of €27k i.e. €4686 to the revenue. In this case no sale invoice was issued to the insurance company.The insurance procceeds were just sent out by cheque.
Question 2. As he has not handed over 21.50% of the the insurance proceeds as above, is he entitled to reclaim the vat on the replacement commercial jeep?
Thanks a lot
A vat registered person buys a commercial jeep say €35k nett having reclaimed the VAT. 18 months later the jeep is stolen and the insurance company pays out say €27k. The registered person then goes and buys a replacement commercial jeep for €25k nett. Assume VAT at 21.50% and ignore capital allowances.
Question 1. Does the €27k insurance proceeds constitute a sale i.e does he have to hand over 21.50% of €27k i.e. €4686 to the revenue. In this case no sale invoice was issued to the insurance company.The insurance procceeds were just sent out by cheque.
Question 2. As he has not handed over 21.50% of the the insurance proceeds as above, is he entitled to reclaim the vat on the replacement commercial jeep?
Thanks a lot