I’ve recently taken a load of scrap metal from my business and received a payment for it into my personal account.
As I’m VAT registered, do I have to create an invoice for this and include VAT in the amount received, meaning that I have actually received less as I didn’t give them a VAT invoice and VAT wasn’t added to the amount they paid?
Sole trader or ltd company?
I’m a sole trader. Does that make a difference?
As a sole trader you and your business are legally the same entity and you can’t buy or sell goods or services from yourself. When you take goods or money from your sole trader business no assets or cash have actually changed hands for tax purposes, so the payment into your personal bank account is simply a bank transfer from the business current account to your proprietor drawings account.
I think you may have misunderstood the OP.
Scrap metal (from the OP’s business) has been taken to a scrap metal dealer and the scrap metal dealer paid the OP for this scrap. The scrap dealer paid the money directly into the OP’s personal account.
Effectively the OP has sold something from the business but the buyer has paid into the personal account rather than the business account. The question is how to account for this.
Fair enough. In that case the same advice still stands - you and the business are the same, so it still counts as a sale in the business books (but one where the payment went to the drawings account rather than the business current account) and the amount received would have to be treated as inclusive of VAT.
If the dealer is VAT registered you could try asking them if they’ll pay you the extra VAT if you give them a VAT invoice for what-you-received-plus-VAT, the worst they can say is no.