Update: VAT Changes for Construction Industry Delayed

The implementation of the domestic reverse charge for construction services, which has caused much concern for the construction industry, has been delayed until 1 October 2020. Full details can be found here: Revenue and Customs Brief 10 (2019): domestic reverse charge VAT for construction services – delay in implementation. Please note: This article is a … Continue reading Update: VAT Changes for Construction Industry Delayed

Major VAT Changes for the Construction Industry

Update: This has now been delayed until 1/10/2020. Find out more here. 1st October 2019 marks the introduction of the Construction Services Domestic Reverse Charge (CSDRC). The new rules are intended to counter what HMRC describes as ‘missing trader fraud’, where a trader reclaims VAT on purchases which the supplier has no intention of paying … Continue reading Major VAT Changes for the Construction Industry

VAT Warning for Cafes and Sandwich Bars

Over the last few years, VAT on food has enjoyed more than its 15 minutes of fame in the tax spotlight. But with Making Tax Digital (MTD), it is something that cafes and sandwich bars would do well to look at again. Food or drink items which are sold hot at the point of sale … Continue reading VAT Warning for Cafes and Sandwich Bars

Disbursement or Re-Charged Expenditure?

Where a business incurs expenditure which is passed on to a customer, it is important to recognise the difference between a Disbursement and Re-charged Expenditure. A cost incurred on behalf of a customer is classed as a Disbursement and is reclaimed from the client, but does not form part of the main supply of services … Continue reading Disbursement or Re-Charged Expenditure?

VAT Road Fuel Scale Charges From 1st May

The VAT Road Fuel Scale Charges have been amended with effect from 1st May. The new rates can be found here. If a business is VAT registered and purchases road fuel for business use, but there is also private use of a vehicle, then an adjustment needs to be made to ensure that VAT is … Continue reading VAT Road Fuel Scale Charges From 1st May

HMRC Victorious in VAT Dispute Over Compound Interest

HMRC has succeeded after a decade-long battle with department store, Littlewoods over compound interest. Between 1973 and 2004, Littlewoods overpaid millions in VAT and, although they were refunded the sum plus simple interest, they took legal action seeking compound interest for the “mistake in law”. The law states that ‘where a taxable person has overpaid … Continue reading HMRC Victorious in VAT Dispute Over Compound Interest

HMRC Back down in VAT on Advice Fees Case

HMRC have backed down in a landmark case that has been ongoing for the past 18 months. The case related to the payment of VAT on advice fees for Birmingham based Barnett Ravenscroft Wealth Management. The case was opened when the firm asked for a £462,528 VAT repayment, relating to fees which it was charging … Continue reading HMRC Back down in VAT on Advice Fees Case

Choosing the Right VAT Scheme for Your Business

There are a number of ways to account for VAT. While standard VAT accounting is used by many firms, small business owners may wish to consider the alternative schemes that are available. Choosing the most suitable option could save you a considerable amount of time and money. Annual accounting scheme Under the annual accounting scheme, … Continue reading Choosing the Right VAT Scheme for Your Business

VAT Fuel Scale Charge

To make accounting for private use of fuel simpler, you can choose to apply the VAT fuel scale charge. This scale charge adds back a fixed sum each VAT period to account for the private use of fuel, making redundant any need to split the mileage between business and private use. The scale charge for … Continue reading VAT Fuel Scale Charge

Concerns for small businesses using the VAT flat rate scheme

From 1 April 2017 HMRC are changing the rules for using the VAT Flat Rate Scheme (FRS).  In an attempt to wipe out what HMRC has seen as abuse of the flat rate scheme, businesses will now need to determine whether they fall into a “limited cost trader” category, by comparing the percentage of goods … Continue reading Concerns for small businesses using the VAT flat rate scheme