Running a business - VAT

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VAT - 21.05.2024

Selling services online: help clients get the VAT right

Most UK businesses sell services rather than goods, which have various VAT challenges when sold online, particularly if three parties are involved in a deal. How should your clients account for the VAT correctly?
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VAT - 17.05.2024

How, when and why should you opt to tax a property?

Opting to tax a property began in the 1980s following an EU ruling to override UK VAT rules. The main effect is that you must usually charge VAT when you make supplies of the property, e.g. charge rent, but why should you bother opting?
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VAT CASES - 08.05.2024

Partial exemption: was square footage method accurate?

The case. Hippodrome Casino Ltd (H) had exempt income from gaming activities and taxable sales generated by eight bars and restaurants on its trading premises. H argued that apportioning input tax on mixed costs and overheads by using the partial exemption standard method based on splits between exempt/taxable sales was distortive, so used a method instead based on square footage splits in the building, i.e. the gaming areas were exempt and hospitality areas were taxable. HMRC disputed its accuracy on the basis that the hospitality areas had a dual use because they were also used to give free food and drink to the gaming customers, i.e. the area was not wholly linked to taxable sales. ...
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VAT CASES - 08.05.2024

Could HMRC use supplier’s server as evidence of off-record sales?

The case. New Claire Wine Ltd (W) was a wholesaler of beers, wines, spirits and other alcoholic drinks and HMRC issued a best judgement assessment for £176,656 in relation to suppressed sales made between 2012 and 2017. A penalty for “deliberate not concealed” behaviour was also issued, along with similar assessments and penalties for corporation tax. HMRC used a computer server as evidence that had been seized by the Italian tax authorities in a fraud investigation about wine imported from Italy to the UK. It contained 7m files, including information about off-record deals involving W. The taxpayer argued that the server should not be used as evidence to support HMRC’s calculations. ...
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PARTIAL EXEMPTION - 08.05.2024

Can we assume we are “de minimis”?

Q. Our property letting business had a recovery percentage of 85% on our overhead expenses (residual input tax) with the standard method of partial exemption for our last tax year but we were de minimis with the numbers, so actually claimed 100%. With the standard method simplification procedure, do we claim 85% or 100% of our input tax on a provisional basis in the next tax year? ...
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COMPLIANCE - 08.05.2024

What’s the difference between an error and an adjustment?

Your business must disclose errors to HMRC above certain limits in writing. But it can include accounting “adjustments” on the next return. What are the main adjustments (that aren’t errors) that your business could make?
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Running a business - VAT

Most read Tips & Advice

VAT - 18.03.2024

Leasing cars - what are the VAT pros and cons?

You’re considering leasing instead of purchasing cars for your business. This will improve cash flow and, according to the salesperson, allow you to reclaim VAT that you would not otherwise be entitled to. Are they correct?
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VAT - 17.04.2024

Avoiding the VAT registration cliff edge

Although the Chancellor announced an increase to the VAT registration limit in the Spring Budget 2024, it was relatively modest. As a service business if your turnover exceeds the new limit can you legitimately avoid having to register?
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VAT - 19.03.2024

Management charges between connected companies

One of your clients owns two companies and wishes to move profits between them. Another client has a holding company that wants to charge its trading subsidiaries for its services. What VAT issues must they consider before making management charges?
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