Insurance compensation under the VAT flat-rate schemeJul. 13, 2017, 9:21am
Insurance 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.
We Think. You Gain.
The information in this blog is provided ‘AS IS’ with no warranties, and confers no rights.
Yes, we are accountants, but if we are not your accountant this article does not create a client relationship. This blog is technical/ tax information and should not be seen as advice. All circumstances are different – you should consult with an accountant/ tax adviser before you rely on this information.
Feel free to challenge us, disagree with us, or even profess your undying love in the comments section of each blog entry, but we reserve the right to delete any comment for any reason whatsoever (abusive, profane, rude, or anonymous) – so keep it polite, please!