Insurance compensation under the VAT flat-rate scheme
Jul. 13, 2017, 9:21amInsurance compensation under the VAT flat-rate scheme…
What is the VAT treatment where you are on the VAT flat-rate scheme and receive a substantial insurance pay-out, say for damage to your trading premises?
Should this exempt income be included in the flat-rate scheme turnover?
Compensation paid out as a result of an insurance claim is not exempt from VAT, but is outside the scope of VAT because it is not a consideration for a supply, being recompense for loss.
Exempt income is included in the flat-rate scheme however, outside the scope income is excluded. Paragraph 6.3 Notice 733 refers.
If you have a VAT query why not contact us to discuss the implications. Our team has a wealth of experience and would love to hear from you.
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