Final VAT input tax claims

When closing CVLs some IPs find that it helps with the ordered closure of the case to draw their remuneration as the last expense paid from the estate and, where the company was VAT registered, for those monies drawn to be the amount net of VAT. The practitioner will then submit a final input tax reclaim for the VAT element of the fee invoice and arrange for HM Revenue and Customs to make the cheque for the VAT reclaim to be made payable to the IP/practice. Those monies are then paid straight in to office account as the VAT element of the IP’s remuneration. It has been suggested to us that this approach is no longer permitted by HM Revenue and Customs as they will only make the VAT reclaim cheques payable to the insolvent estate. However, I have spoken to the Insolvency Helpline who indicate that whilst it is easier for them to make the cheques payable to the insolvent company, they are still prepared to make them payable to the IP/practice in circumstances where the IP indicates to them that the estate bank account has been closed.