How to log VAT payment on a R&D tax credit return via 3rd party supplier

I have an urgent request (as I need to submit my VAT return tomorrow).

We applied for R&D tax credits via a 3rd party company Grant Tree.

We received £14K from them however the total would have been £28K however HMRC took a payment that was owed to them and Grant tree took a success fee of which they charged VAT.

How do I record the VAT of VAT £1,158.48?

Kind regards,


Accounting-wise I presume you’d have to record it as receiving the full value of the grant, then making a payment to HMRC for what they were owed and a purchase invoice (“miscellaneous expenses” if you can’t think of anything more appropriate) for the “success fee”, with the appropriate VAT rate.

If what you actually received was the net £14K then you can use a fake bank account in QuickFile like you would for a merchant account, tag all the ins and outs in there and then the net income you actually received becomes a transfer from the fake account into your bank current account.

NB: I am not an accountant, just a satisfied QuickFile user!

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Thanks a lot for your response! Yes its actually the second option, they sent the money minus what HMRC took and minus their fee/ tax

Is this the VAT you paid to Grant tree on top of their services? Do you have a VAT receipt for this with that amount stated?

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