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Top ten tips on VAT
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Top ten tips on VAT

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What a day, over 1,000 people through the door. …

What a day, over 1,000 people through the door.

www.beinspired09.co.uk

Published in: Business

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Transcript

  • 1. VAT Hot Topics 1 October 2009 The VAT Consultancy Laurel House Station Approach Alresford SO24 9JH Tel: 01962 735350 Fax: 01962 735352 www.thevatconsultancy.com
  • 2. Agenda
    • 1) VAT Liability
    • 2) VAT Registration
    • 3) Flat Rate Scheme
    • 4) Cash Accounting / Annual Accounting
    • 5) Prompt Payment Discounts
    • 6) Bad Debt Relief
    • 7) New Voluntary Disclosure Rules
    • 8) Penalties
    • 9) Complex Areas
    • 10) Future VAT Rate Change
  • 3. VAT Liability
    • Exempt
    • Taxable
    • Outside the scope
    Standard Rate Reduced Rate Zero Rate
  • 4. VAT Registration
    • Compulsory
    • Voluntary
    Look back test Look forward test Intending trader Trading under the limit VAT Threshold April 2009 = £68,000
  • 5. Flat Rate Scheme
    • Entry level for taxable turnover is less than £150,000.
    • Other income level ignored.
    • The exit level is £225,000.
    • Notice 733.
    • Benefits - a flat rate payment .
  • 6. Cash Accounting/ Annual Accounting
    • Cash Accounting
    • Income not exceeding £1.35 million in the past 12 months to join.
    • Exit level of £1.65 million.
    • Notice 731.
    • Benefits – built in bad debt relief.
  • 7. Cash Accounting/ Annual Accounting
    • Annual Accounting scheme
    • Same entry level applies as cash accounting and exit level.
    • Notice 732.
    • Benefits - one VAT return and payments are made on account by agreement with Revenue & Customs or by 9 equal monthly instalments with a final balance in payment.
  • 8. Early Settlement Discounts
    • VAT valuation rules sometimes complex
    • Value for prompt payment/early settlement discount as if discount taken
    • Therefore lower VAT even if payment NOT early
  • 9. Bad Debt Relief
    • Unpaid sales invoice that is more than 6 months old.
    • VAT Notice 700/18.
    • Writing Off Procedure.
    • Principles apply to unpaid purchases too!
  • 10. Voluntary Disclosures
    • Increased from £2,000 to £50,000, but greater of £10,000 or 1% of VAT ‘turnover’ < £5M.
    • Period of discovery not error.
    • Notification to HMRC -> penalty regime
  • 11. Penalties
    • Effective: VAT Returns to be submitted on or after 1 st April 2009.
    • How is the penalty charge calculated?
    • Percentage of the extra tax due.
    • Subject to behaviour that gave rise to the error.
    • Lower the tax ‘at risk’ and less serious the behaviour, the smaller the penalty.
  • 12. Anti-Forestalling
    • Rate change from 15% to 17% 1 Jan 2010
    • Potential savings to be made but be wary of rules
    • See video stream on www.thevatconsultancy.com
  • 13. Complex Areas
    • Property – varies between developer and owner; commercial and residential etc
    • Place of supply of services – very different to rules for goods. Varies depending on TYPE of supply. Changes 1 Jan 2010 and 1 Jan 2011
  • 14. ANY QUESTIONS?
    • Contact any of us on:
    • 01962 735350
    • www.thevatconsultancy.com