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

Are You Aware of Making Tax Digital?

According to recent statistics, 40% of UK small business are blissfully unaware of the Government’s Making Tax Digital (MTD) plans. With three months until the go-live date in April this year, that is a worrying figure. While 1.1 million business are set to fall under the scope of MTD for VAT, that equates to 440,000 … Continue reading Are You Aware of Making Tax Digital?

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?

Making Tax Digital for VAT: An Update

The issue of VAT is currently at the fore of the government’s Making Tax Digital (MTD) initiative. Here we provide an overview of the latest position. What’s changed? MTD was previously set to be implemented between 2018 and 2020. However, in response to concerns raised by experts over the pace and scale of the changes, … Continue reading Making Tax Digital for VAT: An Update

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

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

Making Tax Digital Delayed until 2020

The Treasury have delivered what is potentially good news for many (yes, you have read that correctly).  Making Tax Digital, or MTD to give it its affectionate moniker, has been both delayed and reduced in terms of requirement. For businesses that are VAT registered, VAT returns will still have to be submitted via MTD compatible … Continue reading Making Tax Digital Delayed until 2020

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

2017 Budget Review

Following on from the Chancellor's first and last Spring Budget, we are pleased to provide you with our summary of the key announcements, along with our tax tables for the 2017/18 tax year: The main changes include: The tax-free dividend allowance will be reduced from £5,000 to £2,000 from April 2018. Class 4 national insurance contributions … Continue reading 2017 Budget Review

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