ENFORCEMENT - 02.10.2024
HMRC targets electronic till systems
HMRC thinks that VAT is being underpaid because till systems are being manipulated. Is it a good time to review your own audit trail and procedures?
Read more
VAT
Returns, forms & HMRC admin
VAT -
Returns, forms & HMRC admin
Recently added Tips & Advice
VAT CASES - 02.10.2024
Did company trade with fraudulent suppliers?
The case. Gary Turner (GT) was the sole director of a scrap metal trader Loy Commodities Ltd (LC) and made all commercial decisions about suppliers and pricing. HMRC visited the trading premises on five separate occasions and warned GT that many of LC’s suppliers were involved in VAT fraud and that he should carry out proper due diligence checks to verify their status. An assessment for £367,096 was subsequently issued to LC to disallow input tax. A penalty of £107,307 was issued, which was transferred to GT when LC was dissolved in 2022. ...
Read more
INPUT TAX - 02.10.2024
Can we claim input tax on director’s new watch?
Q. The managing director of our company has purchased an expensive watch and we are declaring it as a benefit in kind for his personal tax. Does this mean that the company can claim input tax on the purchase of the watch as long as we charge VAT if we sell it in the future? A. Unfortunately not. To claim input tax on any purchase of goods or services, they must be used for the purpose of your business and linked to the taxable supplies that you make. As far as VAT is concerned, it makes no difference how you treat an expense for direct tax purposes. The watch is for the private use of the director and input tax cannot be claimed. ...
Read more
PARTNERSHIPS - 02.10.2024
How to deal with a change in ownership?
Your business trades as a partnership and one of the partners is selling their share to a third party. How should you notify HMRC of this change and would it be different if you traded as a limited company?
Read more
VAT - 01.10.2024
Sale of old equipment - is it VATable?
Our subscriber sold a machine which he had used in his business before he was VAT registered. His accountant has told him that he should have charged VAT on the sale and that he must now account for it out of the proceeds. Is he correct?
Read more
VAT CASES - 02.09.2024
Was HMRC assessment out of time?
The case. Gillian Graham (G) was compulsorily registered for VAT by HMRC on 1 May 2017 with the first VAT period ended on 28 February 2018. In the absence of a return from G, HMRC issued a best judgement assessment for £270,648 on 7 September 2018 for this period. G claimed that all sales were exempt from VAT as medical care, so submitted a nil return for this period. HMRC’s computer automatically cancelled the assessment for £270,648 but a separate officer issued a new assessment for the same period on 18 March 2021 for £212,897. G claimed the assessment was out of time and should be withdrawn. ...
Read more
VAT -
Returns, forms & HMRC admin
Most read Tips & Advice
VAT - 01.08.2024
VAT and personalised number plates
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?
Read more
LEASED VEHICLES - 02.09.2024
Maintenance charge on leased cars: do we claim 50% or 100%?
Q. Our business leases three cars and VAT is charged on each monthly instalment. We claim 50% as input tax, as per HMRC’s policy in VAT Notice 700/64 . A separate charge is made by the leasing company for maintenance each month and we have also claimed 50% input tax on this expense. Is this correct? ...
Read more
INVOICES - 02.09.2024
Can our customer insist that we amend our sales invoice date?
Q. My business sells bathroom furniture and equipment and our policy has always been to issue invoices to our builder clients on the first day of the month because this delays the payment of VAT on our return by one quarter. A builder has asked us to issue invoices to her business on the last day of the month, one day earlier, so she can claim input tax more quickly. Must we agree to her request? ...
Read more
