You are liable to account for output VAT if a supply has been made. If the goods had been stolen, then as no sale was made, there would be no liability for the output tax. As the goods were sold from your business premises, it is not a theft of stock, but would be deemed to be a theft of cash. Unfortunately you will therefore be liable for the output tax.
If the goods had been sold at below the marked price and the monies placed in the till, then output VAT would have been due on this lower amount. If you could satisfy HM Revenue & Customs that the customer and employee colluded to deprive you of the goods, then HM Revenue & Customs would accept that there was a theft of goods not cash and thus no output tax would be due.
By Jo Nockels
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