Running a business - VAT

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VAT - 22.10.2020

Intending trader registrations rejected

Registration. Any business can register for VAT voluntarily as long as it is making taxable supplies. However, a person who carries on a business and has an intention to make taxable supplies in the future can also choose to register. This is usually in order to reclaim input tax on preparatory expenses. ...
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VAT - 22.10.2020

Early termination and compensation fees: new policy

You act for clients that provide ongoing services to their customers. Sometimes, a customer will pay a fee to cancel or amend a contract early due to a change in trading circumstances, e.g. coronavirus. Do your clients need to charge VAT on these fees?
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VAT - 21.10.2020

VAT traps with inter-company management charges

Two businesses share costs, e.g. staff salaries and premises, but the expenses are paid by one. This arrangement it not unusual but it can create VAT problems for the businesses concerned. What are they and how can you avoid them?
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VAT - 21.10.2020

Tax-free shopping to end

No more refunds. At the end of September the government announced the end of the VAT Retail Export Scheme (VAT RES) with effect from 1 January 2021. This means that overseas visitors will no longer be entitled to a VAT refund on items they buy in England, Scotland or Wales which they take home in their luggage. The decision was made after a public consultation which addressed several key questions regarding VAT RES (see The next step ). However, the change doesn’t mean the end of VAT-free sales. ...
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VAT - 21.10.2020

Countdown to new VAT rules

HMRC has published new guidance on what steps your business may need to take from 1 March 2021 if it supplies or receives building or construction services. How should you use the guidance?
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VAT - 08.10.2020

Pre-credibility checks

Over the past few months we have seen letters from HMRC across all taxes that ongoing enquiries will be suspended during the coronavirus pandemic. Having done a little digging, it appears that HMRC has deployed additional resources into conducting pre-credibility checks, namely from teams that would normally be conducting general compliance checks....
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Running a business - VAT

Most read Tips & Advice

VAT - 08.09.2020

Subcontractors - a VAT trap

The First-tier Tribunal (FTT) recently considered the VAT position of a business which used subcontractors to carry out its work. HMRC claimed the business was responsible for VAT on the subcontractors’ services. What was the FTT’s decision?
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OUTPUT TAX - 27.08.2020

Can I raise sales invoices in foreign currency?

Q. One of our customers has asked us to raise our sales invoices in euros, which we are happy to do in principle. But are there any specific VAT requirements that we need to be aware of? A. If you issue invoices in foreign currency for supplies of goods or services that take place in the UK, you must convert the total amount of VAT payable into sterling. You must use the rate of exchange that applies at the time of supply. HMRC confirms that you can use any daily rate published in a national newspaper, although the best option is to use HMRC’s own exchange rates, published on its website (see The next step ). This information is published at the beginning of each calendar month and the rate applies for the whole month. Tip. Whichever published rate you use ensure you print a copy of the information and keep it filed with the invoice. ...
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VAT INVOICES - 01.10.2020

Can we accept a supplier’s VAT-only invoice?

Q. We run a building business. One of our subcontractors decided to deregister from VAT three years ago and has now invoiced us during that period without adding VAT. It has now come to light that his accountant has never notified HMRC, so he has been registered during that period of time. He has now issued us with a VAT-only invoice for work done for the last three years, but shouldn’t his accountant have asked to backdate the deregistration date instead? ...
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