Vat treatment for grants

[theboytheboy]

A water company have a grant that will cover £1500 worth of soil sampling and testing etc

I have to now complete a claim form having had the work done and paid for it.

I have asked if we add vat to the £1500, the answer back is its up to us to determine the correct vat treatment.

Interested to hear people's thoughts as getting different answers from people.

Obviously I have asked my accountant but they have advised me badly with regards to vat before.........

 

[Still Farming]

Vat on agents fees etc
Pay /reclaim possibly.

 

[biggles]

I have had grants in the past from Seven Trent for various projects. I have just cashed the grant money and kept the lot, never thought about the fact of it being a VAT inclusive payment. this has never been questioned by my accountant when doing either my VAT returns or end of year books, so i can only assume it must be right ?

 

[onesiedale]

A grant is usually given with no vat on it.
So if they give you £1000 , that is all yours to spend on £1000 worth of testing (ex. vat)
So you pay £1200 for the testing, but claim back the £200 from HMRC and keep the £1000 from the grant.

It's worrying that you are still with your accountant if they have advised you badly before.

 

[workin f nowt]

As @onesiedale says.

 

[Fergieman]

Yes as above, no VAT on grant money.

 

[steveR]

Yes as above, no VAT on grant money.

That is how I (and my accountant) have always interpreted it...

 

[theboytheboy]

A grant is usually given with no vat on it.
So if they give you £1000 , that is all yours to spend on £1000 worth of testing (ex. vat)
So you pay £1200 for the testing, but claim back the £200 from HMRC and keep the £1000 from the grant.

It's worrying that you are still with your accountant if they have advised you badly before.

Sadly I find "professionals" often don't seem any more knowledgeable than I am. Trying to find better accountants/solicitors/agents is easier said than done.

 

[theboytheboy]

They have advised me to charge vat.......