HMRC have reminded business that barter or contra transactions (supplies with no money payment) are subject to tax and VAT. All receipts arising from contra, barter or reciprocal arrangements must be valued at the money’s worth of the goods and services exchanged. The corresponding expenses should also be brought into account. If both businesses involved in the transaction are registered for VAT, both should account for VAT on each separate supply made to each other, even if no money changes hands, or only a net amount is paid after setting off one outstanding balance against the other.
HMRC remind businesses that barter or contra transactions are subject to tax and VAT
on 8 July 2019 with No Comments