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A friend of mine runs a company (Ltd). The company was involved in a legal case which I believe was settled. It related to an employee being injured while at work. The insurance company paid out I believe and as far as I know paid the legal costs etc also. However, my friend's company were invoiced for these costs directly on the basis that it (and not the insurance companies involved) could reclaim the the VAT on these invoices.
My question is this: Can my friend's company correctly reclaim the VAT on these invoices? If yes what are the sections in the VAT Act (and or any regulations and legal cases) that allow this?
I recall a situation here in work where one of the directors had a car crash. We paid the bill to the garage, the insurance paid us in full and we reclaimed the VAT on behalf of thE insurance company because of their VAT exemption they dont pay any VAT
I made an enquiry to Revenue a few years ago on behalf of a client who had received a "net of VAT" car damage payout from their insurers, who in turn had asked my client to claim the VAT element of the repair bill in their VAT return. The Revenue's response was that it is highly illegal to reclaim VAT on repairs to a private motor car.
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