Surely the VAT refund would belong to your company? I would have thought it would only be an issue if you paid it across to yourself as income

Welcome to the forum jt222.

It might do.

Can you tell us more about the scenario you're describing?

I am a vat registered sole trader doing new build work which is 0 rated for vat and so get a vat refund every 3 months as I can't charge vat but still have to pay it on materials. I can't see how this can possibly be classed as a windfall as the money I get back is money I have had to lay out. I have never spoken to my IP in person as he is far to busy and have been left dealing with a girl who I am afraid doesn't know what I am talking about.

Thank you.

Do you use someone to do your books for you?

Yes, my accountant does them.

OK. So would I be right in guessing that your trust deed payment is based on the accounts that your accountant does for you?

Based upon your profits effectively?

Presumably you've been getting VAT refunds for some time?

I haven't been a sole trader for very long as was previously a director of a ltd co. I resigned from the company due to a fallout with the other director and have since entered my trust deed.
My accountant had to back up my estimated earnings and my payments were based on this.
As a sole trader I have to pay tax on profit made over the whole year and these vat returns are obviously included in my accounts.
I would compare the vat return being treated as a windfall to a customer paying an invoice as a windfall which is surely ridiculous as this money is not profit

I'd have thought your contribution will be assessed on profitability, with a VAT refund effectively reducing your costs and therefore increasing your profitability.

So... I'm thinking this is an income issue rather than a windfall issue. It will be interesting in due course to see if others here agree. I'd suggest that you check back.

Of course the only opinion that really counts will be your trustee's, so you're doing the right thing by trying to keep them informed.

I think the same re income not profit and can't understand how anyone could think any different. I find it very frustrating when I phone that I am not allowed to speak to the IP and instead get stuck trying to explain myself to a different person who doesn't know what I am talking about every time. Is this normal?

Hi jt222.

It's perfectly normal for a trustee to delegate a large amount of their workload, though they do remain responsible for the work that is done in their name.

Has the employee that you've been communicating with told you that this is a windfall that needs to be paid over?

"As part of your TD, any asset through PPI, tax,inheritance etc can be classed as a windfall which means that they will be introduced into the arrangement to benefit your creditors" is what this person is telling me. I don't think they realise what a vat return is.
I have asked them how a vat return differs from a customer paying an invoice and await there reply

She has just replied " I do not understanding your question"
VERY FRUSTRATING!

Hi jt222,

From what you have described I don't see this as a windfall issue.

I think the response you have received from your relationship manager is just a standard response.

Your probably best to ask for a manager or someone more senior to review this for you and respond.

As TDA has pointed out though it's only really the opinion and view of your Trustee that matters.

Let us know how you get on when you speak with someone more senior.

Hi jt222

I understand why this would be a worry for you. As you are self employed and in a trust deed, could you not just charge for your labour and get the customer to buy the materials? Once the building is complete and signed off they can then submit a claim to get all the vat back on the materials themselves, must be within 3 months of date of completion certificate and is a simple process.