VAT

VAT ON DISBURSEMENTS

2018-07-17T17:55:34+00:00March 30th, 2018|Categories: VAT|Tags: , , |

VAT ON DISBURSEMENTS I am a marketing consultant and I have a question about VAT on disbursements. I am incurring some travel expenses which my client has agreed to pay so I will be recharging these expenses to them, I am VAT registered but there is no VAT on my travel costs – do I need to charge VAT to the client when I recharge them? If you are VAT registered and make a purchase on your customers’ behalf you may be able to invoice your customer without charging VAT. This treatment is called ‘disbursements’ for VAT. This can be advantageous [...]

AUTUMN BUDGET 2017

2018-07-05T22:23:02+00:00November 25th, 2017|Categories: Budget Reports|Tags: , , , , , , , |

AUTUMN BUDGET 2017 Chancellor Philip Hammond has delivered his first Autumn Budget under the new system he announced this time last year. The aim of the new system is for the Finance Bill, which is normally published after the annual Budget, to reach Royal Assent stage in the spring of each year, before the start of the following tax year. This change in the annual timetable is designed to help Parliament to scrutinise tax changes before the tax year where most take effect. The Finance Bill should be published on 1 December 2017. By the end of March 2018, [...]

June Questions and Answers

2017-06-22T14:24:36+00:00June 22nd, 2017|Categories: Questions & Answers|Tags: , , , |

Q. Before I became registered for VAT, I bought a capital item from a friend, which cost £1,000. As it was a private purchase, I did not pay any VAT. I have now joined the flat rate scheme (FRS) for VAT and have just sold the same item for £500. Should I have charged VAT on the sale and included the gross total in my calculation for flat-rate VAT? A. HMRCs VAT Notice 733 at paragraph 15.9 confirms that where input tax is reclaimed on capital expenditure goods then, when the goods are eventually sold out of the business, you [...]

VAT Flat Rate Scheme: changes take effect

2017-05-15T16:00:14+00:00May 15th, 2017|Categories: VAT|Tags: , , , |

The VAT flat rate scheme (FRS) is used by many small businesses to help simplify their VAT reporting obligations. Businesses could often gain a cash advantage from using the scheme, but this advantage has been significantly curtailed from 1 April 2017, particularly in relation to service-related businesses. Whilst the FRS continues to operate, many businesses will no longer find it economical 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 [...]

April Questions & Answers

2018-07-03T01:07:04+00:00April 14th, 2017|Categories: Questions & Answers|Tags: , , , |

Q. I have recently become aware that one of my employees has been selling my stock and pocketing the cash. As the money has never gone in the till, do I have to account for VAT on it? A. The VAT treatment depends on whether or not you've actually supplied the goods, what happened to them, who was responsible for them at the time and if you've issued a VAT invoice. Generally, where goods are stolen, no supply is made by the business, and so no output tax is due. However, where goods have been sold and cash is stolen, [...]

March Questions & Answers

2017-03-29T01:16:25+00:00March 29th, 2017|Categories: Questions & Answers|Tags: , , , , |

Q. Will I have to pay stamp duty land tax on a property I am about to inherit? A. Stamp duty land tax (SDLT) is generally payable on land transactions. There is a land transaction when land passes to a beneficiary under a will, or by virtue of the law on intestacy. However, the legislation governing SDLT (Finance Act 2003, Schedule 3, para. 3A) provides that the acquisition of property by a person: in or towards satisfaction of his entitlement under or in relation to the will of a deceased person, on the intestacy of a deceased person is exempt [...]

February questions and answers

2017-02-28T01:18:46+00:00February 28th, 2017|Categories: Questions & Answers|Tags: , , , |

Q. Due to unforeseen circumstances I have recently had to sell my house and down-size to a smaller property. I sold the house for £20,000 less than I paid for it. Can I offset this loss against income from my business and reduce my income tax liability for this year? A. Unfortunately the tax law does not permit you to do this. I am assuming that you are not trading in properties and the house was either your main residence or an investment asset. Losses on the sale of a principal private residence are generally not allowable losses for tax [...]

Changes to the VAT flat rate scheme

2017-01-06T00:44:16+00:00January 6th, 2017|Categories: VAT|Tags: , , |

In a surprise announcement in the 2016 Autumn Statement, the Chancellor announced that changes are to be made to the existing flat rate scheme for VAT (FRS) in order to tackle perceived 'aggressive abuse'. The changes, which will take effect from 1 April 2017, are designed to 'reduce the incentive for firms and agencies to move employees to self-employment to exploit VAT simplification aimed at small businesses'. The subsequent HMRC policy paper published on 5 December sets out the details of the changes, which will affect any users, or prospective users, of the FRS. The FRS is a simplified VAT [...]

HMRC clarify pre-registration of VAT policy

2016-12-12T21:50:06+00:00December 12th, 2016|Categories: VAT|Tags: , , |

HMRC have recently published Brief 16 (2016), entitled Treatment of VAT incurred on assets that are used by the business prior to VAT registration. Broadly, the brief aims to clarify when, and to what extent, VAT is deductible and what to do if the correct treatment has not been applied. A business registering for VAT may recover tax incurred on goods and services before their effective date of registration (EDR). This allows the recovery of VAT against goods and services as long as they are used by the taxable person to make taxable supplies once registered. Services must have been [...]

Subscribe To Our Newsletter

Subscribe here to receive our email newsletters containing free tax and business tips and updates from our blog.

You have Successfully Subscribed!

FREE MAKING TAX DIGITAL FACTSHEET

Enter your name and email address below to receive our free Making Tax Digital factsheet.

Success, Please check your email.