VAT on IVA supervisor charges

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fullstop

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Post by fullstop » Thu Sep 09, 2010 1:23 pm
If an IP worked on behalf of the individual but charged the creditors rather than the individual, the creditors would recover the VAT and thus, on a typical 20% percentage the creditors could receive another 3.5p in the pound - any reason it is not done this way???
 
 

Shining

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Post by Shining » Thu Sep 09, 2010 2:01 pm
Too technical for me but we'll keep it bumped up for someone to comment on. xx
IVA final payment left the bank on the 26th January 2013...looking forward to a debt free future.
 
 

liamjames

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Post by liamjames » Thu Sep 09, 2010 2:18 pm
Hi fullstop!

The fees are not actually charged to the creditors - they can't reclaim VAT on money they have never had.

Technically speaking, your contributions go to the insolvency practice, and then they pay the costs of the IVA. Only after this do they distribute a dividend to your creditors.

If anyone could reclaim the VAT on the costs of the IVA, it would be your insolvency practice. They are not normally tax-exempt, however.

Hope this helps. :)
Last edited by liamjames on Thu Sep 09, 2010 2:19 pm, edited 1 time in total.
Take care,

Liam James
Varden Nuttall
http://www.vardennuttall.co.uk

Read our reviews here: http://www.iva.com/iva_companies/Varden_Nuttall.asp
 
 

MelanieGiles

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Post by MelanieGiles » Sat Sep 11, 2010 1:53 pm
Output VAT charged by IPs on their fees cannot be reclaimed by the individual concerned, regardless of whether they are VAT registered or not.

The original poster makes an interesting point, and I agree that this would produce higher returns, but logistically it would be too difficult to administer across the board, and creditors accept that they are indirectly bearing the VAT costs.
Regards, Melanie Giles, Insolvency Practitioner
 
 

plasticdaft

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Post by plasticdaft » Thu Jul 28, 2011 2:24 pm
Thought I'd bump this back into the limelight as it appears rather appropriate!!

Paul
Discharged today the 8th feb 2012. View is much brighter now.
Continuing to rebuild our credit worthiness.
 
 

carole2662

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Post by carole2662 » Thu Jul 28, 2011 4:11 pm
Haven't I heard somewhere about the government may be stopping VAT on IVAS. Maybe I dreamed it as I have been having some funny dreams lately.
 
 

Ivoryfalcon

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Post by Ivoryfalcon » Thu Jul 28, 2011 4:15 pm
Very appropriate!! Not so sure that the company who went to tribunal really understood the knock on effect for many many IP's. Or perhaps they did and may explain some recent changes.

VAT Exemption/Partial exemption is, in theory, a simple concept. Application in the real world can be a complete nightmare!! It could well leave a great deal of IP's far worse off, not something that's very helpful in these austere times.
Last edited by Ivoryfalcon on Thu Jul 28, 2011 4:30 pm, edited 1 time in total.
 
 

MelanieGiles

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Post by MelanieGiles » Thu Jul 28, 2011 8:52 pm
I think that calling the VAT Tribunal decision "a complete nightmare" is very appropriate!
Regards, Melanie Giles, Insolvency Practitioner
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