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My self-employed client uses specialist photographic equipment in his business. Following a minor dispute with a supplier he was given a £400 voucher to use towards the purchase of a new camera. He has used that voucher when buying a new camera costing £600 therefore paying just £200.
My initial thought is that my client should be treated as paying £167 plus £33 for VAT. In other words he will be able to reclaim £33 input tax and the balance of £167 will be available as an annual investment allowance.
However the retailer has issued a VAT invoice showing the price as £500 plus £100 for VAT of which £400 was satisfied through the voucher and the balance of £200 by cash. This would suggest that an input tax claim of £100 and an annual investment allowance...
