VAT flat rate scheme and bad debts

If you use the flat rate cash-based turnover scheme you may still be due a VAT reclaim even though you will not have paid a VAT contribution to HMRC. Section 14 of the VAT Notice 733 spells it out: http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageVAT_ShowContent&id=HMCE_CL_000345&propertyType=document#P633_59475 The following is extracted from HMRCs notice: If you use the cash turnover method of…

VAT flat rate and cash schemes

Two of the VAT special schemes can provide particular advantages for smaller businesses. The Flat Rate Scheme (reviewed in our June 2012 newsletter) can reduce overall VAT payable, especially for traders that are subject to the lower Flat Rate percentages. Cash Accounting allows you to defer payment of VAT added to your sales until the…

Charities and VAT

Charities only need to account for VAT on those parts of its activities that are within the scope of VAT. A quick checklist follows: * Sale of donated goods from a charity shop – zero rated supply * Investment income, bank interest etc – outside the scope of VAT * Donations from general public –…

VAT on salary sacrifice schemes

Due to a recent European Court of Justice ruling, HMRC now consider that the provision of a benefit via salary sacrifice to employees constitutes a supply of services for consideration and is therefore subject to VAT. Benefits that will be affected include: * Cycle to work schemes. * Face value vouchers. * Childcare vouchers. *…

HMRC announce VAT disclosure opportunity

H M Revenue & Customs (HMRC) is launching a new disclosure opportunity, this time aimed specifically at businesses evading VAT. The initiative is aimed at businesses not registered for VAT but who are in fact been trading above the turnover threshold, currently £73,000 in a 12 month period. In a similar vain to previous facilities,…

Paying VAT and new penalties

Image via Wikipedia From 1 April 2010 all VAT payments made by cheque will be treated as being paid on the day the cleared funds reach the Taxman’s account. Previously the VAT was treated as being paid on the working day the cheque reached the VAT Office. A cheque will normally take at least three…

Filing VAT online

You might have received a letter from the VATman that officially notifies your company or business to file its VAT return online, or face penalties. If your business had a turnover of £100,000 or more in the year ending 31 December 2009 you are legally required to file your VAT returns online, rather than as a…

VAT number verification

Image via Wikipedia The European Commission have enhanced their on-line service which allows taxpayers to check if the VAT number given to them by a potential supplier or customer is valid. The on-line service has been updated to allow taxpayers to obtain a certificate to prove that they checked that a VAT registration number was…

Backdated claims for VAT refunds

You may have in the past overpaid VAT output tax or underclaimed VAT input tax, and this might date back many years. Now is the time to claim the overpayment back from H M Revenue & Customs. – Claims can be back dated to April 1973, or the date of your VAT registration if later.…

Housebuilders Renting Property

Many building firms are now holding completed residential property which is proving difficult to sell in the current property market. One solution is to rent out this property for a short period in the expectation that property prices will recover. Ordinarily most of the VAT paid on construction costs is recoverable. Unfortunately rents received from…