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VAT and Brexit

2020-02-11T22:21:09+00:00February 16th, 2020|Categories: Blog, VAT|Tags: , , |

HMRC have not yet issued any guidance as to how imports and exports to the EU and out with the EU should be recorded for VAT return purposes after 31 January 2020, what happens with the reverse charge, and what should be recorded in boxes 8 & 9 of the VAT return. The last guidance given was in the case of a no deal Brexit and we are monitoring any new advice as it is issued. HMRC have said: - There will be NO requirement to complete an EC sales list for sales after 1 January 2021. - Intrastat returns [...]

Should I register for VAT?

2019-12-18T23:21:11+00:00December 21st, 2019|Categories: Blog, Business, VAT|Tags: , , , |

In broad terms, and subject to certain exceptions, a business will be required to register to charge and pay VAT once annual sales reach a pre-set annual threshold, which is currently £85,000. This threshold is determined by total sales and is not the same as total profits (which is generally sales minus expenses). However, a business can register for VAT even if its turnover (total sales) is below the threshold and it may actually save tax by doing so, particularly if its main clients or customers are organisations that can reclaim VAT themselves. Example Bill is a non-VAT registered [...]

VAT ALERT: DOMESTIC REVERSE CHARGE IMPLEMENTATION DELAYED

2019-09-10T12:41:54+01:00September 7th, 2019|Categories: Blog, VAT|Tags: , , , |

There has been a last-minute change to the start date for the VAT domestic reverse charge (DRC) for building and construction services. This was scheduled to begin on 1 October 2019. It is now delayed until 1 October 2020. The government cites concern that some businesses are not yet ready to implement the change – and possible coincidence with Brexit – as the reasons for the delay. Despite the delay, the government is still committed to the DRC and there has been no change to the detail of the legislation. The DRC changes the way that VAT is accounted [...]

VAT Reverse Charge for Construction Services

2019-08-25T00:21:04+01:00September 1st, 2019|Categories: Articles & Guides, Blog, VAT|Tags: , , |

The VAT domestic reverse charge for building and construction services comes into effect from 1 October 2019. The reverse charge represents part of a government clamp-down on VAT fraud. A domestic reverse charge means that a contractor receiving a supply of specified construction services must account for the output VAT due, rather than the sub-contractor who supplied the services. The contractor also deducts the VAT due on the supply as input VAT, subject to normal VAT rules, meaning no net tax is usually payable to HMRC. The reverse charge thus removes the scope to evade any VAT owing to [...]

Changes in accounting for VAT after prices are altered

2019-08-23T16:22:48+01:00August 5th, 2019|Categories: Blog, VAT|Tags: , |

HMRC have published Brief 6 (2019), which explains changes to the rules on accounting for VAT, where the amount paid changes after the VAT has been accounted for to HMRC from 1 September 2019. The prices businesses charge for goods and services can be reduced after VAT has been accounted for on a supply, for example when a business delivers goods, some of which are faulty, and it agrees with its customer that the price should be reduced. When this occurs a business normally sends its customer a credit note and gives a refund. The VAT rules specify that, [...]

HMRC clarify VAT zero-rating of transport of disabled passengers

2019-09-02T11:29:29+01:00July 7th, 2019|Categories: Blog, VAT|Tags: , , , |

HMRC have issued Brief 3 (2019), which aims to clarify that the Department's policy on the scope of the VAT zero rate for transport services has not changed following the Upper Tribunal (UT) decision in Jigsaw Medical Services Ltd (2018) UKUT 0222. In this case, the UT heard an appeal by HMRC against the First-tier Tribunal's decision that emergency transport in a specially adapted ambulance was zero-rated, rather than being exempt. This decision may be of interest to suppliers that provide transport services in emergency vehicles (ambulances), or in passenger vehicles (such as, out-patient mini-buses) including those adapted for the [...]

When should a business register for VAT?

2019-09-02T11:27:44+01:00June 22nd, 2019|Categories: Articles & Guides, Blog, VAT|Tags: , , , |

All traders – whether sole traders, partnerships, or limited companies – are obliged to register to charge and pay VAT once annual sales reach a pre-set annual threshold. This threshold remains at £85,000 for the year commencing 1 April 2019. The annual VAT threshold is determined by total sales and is not the same as total profits (which is generally sales minus expenses). A business can make a loss and still need to register for VAT! In summary, a business must register if: its taxable outputs, including zero-rates sales (but not exempt, non-business, or ‘outside the scope’ supplies),have exceeded [...]

MTD for VAT: guidance updated

2019-09-02T11:23:22+01:00June 16th, 2019|Categories: Blog, VAT|Tags: , , , , |

HMRC have published an updated version of their guidance for businesses on Making Tax Digital for VAT. In particular, the guidance now includes information on how businesses should deal with petty cash transactions. Petty cash is traditionally a small amount of cash on hand that covers day to day expenses of a business, such as buying a pint of milk. In some businesses it can be used to describe costs that are not attributable to an individual account in their records. Requiring businesses to record each of these transactions in digital records could be an unreasonable administrative burden for [...]

VAT Flat rate scheme

2019-09-02T11:22:27+01:00May 10th, 2019|Categories: Blog, VAT|Tags: , , |

The VAT flat rate scheme (FRS) is used by many small businesses to help simplify their VAT reporting obligations, although some VAT experts would argue that the scheme is not simple to use. Broadly, the FRS is a simplified VAT accounting scheme for small businesses, which allows users to calculate VAT using a flat rate percentage by reference to their particular trade sector. When using the FRS, the business ignores VAT incurred on purchases when reporting VAT payable, with the exception of capital items which cost £2,000 or more. If the business incurs few expenses, and it operates in a [...]

VAT: Supplies of digital services to consumers in the EU

2019-09-01T23:09:02+01:00January 20th, 2019|Categories: Blog, VAT|Tags: , , , , |

The VAT rules for businesses suppling digital services to private consumers in other member states change with effect from 1 January 2019. From that date, the place of supply will be the UK where both: - a UK business is not established in any other EU member state; and - the total value of cross-border digital sales is less than £8,818 in the current and preceding calendar years. Businesses affected will no longer need to register for VAT in other EU countries where they have consumers or use the VAT Mini One Stop Shop Scheme (VAT MOSS). Where the business [...]

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