VAT on cash discount received from creditor

T

trg

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Hi there,

Am sure this is vatable but i could not find anything specific in legislation.

If a creditor gives a cash/cheque discount to me i.e. is this subject to vat?

I imagine they'd prefer to issue a credit note and document it that way and thus allowing themselves the input vat that way but this may not be the case, they may just write the cheque!

Havent come across this (chance would be a fine thing) but its imminent for a crowd I know and was curious as to the legislation.

There was vat on hte cost of the goods and its effectively a trading receipt but as i say, i could find nothing definitive

TRG
 
Thanks Mandelbrot. It looks to me that if you get a credit note then that crystalises the vat liability which I expected.

However if you don't (14.6 of the vat guide you sent) then could one assume that its a net discount therefore vat remains untouched? that would be my reading of it.

The creditor has no document (purchase invoice or sales credit note) with which to reduce their vat liability so it would follow that the same would apply in debtors case so the vat liability would not be increased by receipt of cheque.
 
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