VAT

Q. One of our directors suffered a workplace accident, which resulted in a serious back injury, and he must now undergo a period of recovery that includes a six-week stay in respite accommodation where he will receive physiotherapy and other treatment. The provider will charge VAT on his food and accommodation costs. Can we claim input tax as a business expense? ...

A First-tier Tribunal (FTT) was asked to rule on a dispute between a company and HMRC relating to a VAT refund. Its decision turned on whether the documents that the company’s claim was based on were sufficient. What was the outcome?

Q. We are a charity and registered for VAT. We recently held a fundraising event, and treated the income as exempt from VAT, but made a loss. Must we now treat the income as standard-rated on our next return as it did not raise funds for the charity? A. The key issue here is whether you intended to raise funds for your charity - projecting a surplus for the event - or whether the commercial reality was that it was a social event where you were hoping to make a surplus, but the primary objective was for people attending to enjoy themselves. For example, there are many reasons why fundraising events might make a loss: bad weather; ticket sales being lower than expected; higher costs than anticipated. This is fine: as long as you promoted the event as a fundraiser in your advertising literature and promotional material and also intended to make a surplus, the VAT exemption on your income is still correct. ...

You’ve purchased a pricey personalised number plate which included VAT. A business associate has told you that because the registration number has a connection with the business you can reclaim the VAT. Is he correct or will HMRC block it?

Your business is partially exempt, and you pay both the call and line rental costs for employees who use a mobile phone for business purposes. How much can you claim each quarter on the bills?

A close relative has set up a new business that is not VAT registered. To help, you have agreed to pay their supplier of advertising services all costs for one year and claim input tax on your own returns. Has your generosity created a connected party problem?