The document outlines a VAT seminar for accountants held on January 22, 2014, covering topics such as partial exemption, VAT accounting for trade with Europe, and detailed examples of taxable and exempt supplies. It provides specific guidance on VAT recovery for various scenarios, including mileage, subsistence, and entertainment expenses, as well as the associated reporting requirements for EU transactions. The content emphasizes the importance of professional advice for VAT-related actions and outlines compliance measures for goods and services transactions in the EU.

1. VAT SEMINAR
FOR GORINGE ACCOUNTANTS
.
22 January 2014

2. AGENDA
•
•
•
•
How VAT normally works
Partial exemption
Mileage, subsistence and entertainment
VAT accounting when you trade with
Europe

3. “NORMAL” VAT ACCOUNTING
•
•
•
•
•
Box 6 - supplies made by you
Box 7 - supplies made to you
Box 1 - VAT on your supplies “Output tax”
Box 4 - VAT on supplies to you “Input tax”
Box 5 – Amount due to/from HMRC

4. SUPPLIES
• Your supplies include sales, services,
proceeds of capital assets
• Supplies to you include purchases,
overheads and capital expenditure
• VAT recovery depends on making taxable
supplies
• Taxable includes zero-, reduced- and
standard-rated supplies

5. ZERO & REDUCED EXAMPLES
• Zero: food (not catering), books, new
housing, passenger transport and
children’s clothing
• Reduced: children’s car seats, domestic
fuel and power, some caravans

6. EXEMPT SUPPLIES
• Exempt input tax irrecoverable unless de
minimis
• Partial exemption
• Exempt supplies include
–
–
–
–
–
Land and buildings (option to tax)
Finance (intermediary not advisory)
Bookmakers, undertakers
Health and most welfare
Sports facilities by non-profit-distributing bodies

7. MEMBERS’ GOLF CLUBS
•
•
•
•
•
•
Subscriptions
£400K (exempt)
Green fees
£75K (Bridport)
Bar sales
£200K (taxable)
Drinks purchased £100K plus VAT
Course expenses £300K plus VAT
VAT returns assuming standard method?

8. GOLF CLUB VAT RETURN
• Before Bridport:
– Box 1 £55K
– Box 4 £29K
– Box 5 £26K
• After Bridport
– Box 1 £40K
– Box 4 £20K
– Box 5 £20K
• Four years?
• Capital goods scheme

9. MILEAGE
• How to limit claims to VAT on business mileage?
• Claim all VAT on road fuel and account for VAT
scale charge on each vehicle; or
on fuel
• Don’t claim any VAT on mileage; or
• Keep detailed record of mileage and business/private split
and
• Claim only VAT on business mileage with no fuel scale charge
• Claim VAT on employees’ business mileage: 1/6 x fuel
element of amount paid (invoices needed)

10. SUBSISTENCE – WHAT VAT
CAN YOU CLAIM?
• Claim no VAT on flat rate allowances
• VAT paid on meals for employees
• If only proportion of cost paid, claim 1/6 of amount
paid
• VAT on cost of canteen facilities for staff
• VAT on meals taken by owner or director when
away from normal place of work on business trip
• VAT on hotels or similar where employees or
owner away from normal place of work on
business

11. BUSINESS ENTERTAINMENT
• No claims allowed
• Any free provision of hospitality to a person
other than an employee
• Entertainment includes any non-reciprocal
provision for no charge of
–
–
–
–
–
–
Food or drink
Accommodation
Theatre and concert tickets
Sporting events and facilities
Entry to clubs and nightclubs
Using yachts or aircraft to entertain

12. STAFF ENTERTAINMENT
• Can claim VAT
• Includes temporary staff, casuals, helpers or
stewards at events
• Excludes former employees (including
pensioners), job applicants and partners, relatives
and friends of employees
• Christmas party for staff only (or staff and
directors) – claim all the VAT
• Just directors – claim no VAT
• Staff and their guests for no charge – restrict claim
to staff element

13. OVERSEAS CUSTOMERS
• Can claim VAT
• Must be reasonable in scale and
character
• Output tax charge unless “strict
business purpose”

14. INTRA-EU TRADE – WHAT MUST YOU
DO?
EU crossborder B2B
transactions
What are the
deadlines ?
B2C and
non-EU
What do you
do ?
How often
must you
make these
returns?
What returns
must you
make ?
What entries
are needed ?
(£100)

15. BUYING GOODS – WHAT’S NEEDED
What
do
you
do?
What
returns
must
you
make?
• Provide your UK VAT number
so VAT not charged
• VAT return
• Intrastat “arrivals” supplementary declaration
• Electronic

16. BUYING GOODS – VAT RETURNS
What entries
are needed?
(£100)
How often must
you make these
returns?
What are the
deadlines?
•
•
•
•
Box 2 - £20 (“acquisitions”)
Box 4 - £20 (assumes you can claim all your input tax)
Box 7 - £100
Box 9 - £100
• Monthly or quarterly
• Month + 7 days to submit

17. BUYING GOODS – INTRASTAT
ARRIVALS
What returns must
you make?
What entries
are needed?
(£100)
How often must
you make these
returns ?
• EU “imports” > £1,200,000 a year
• Movements of goods only (but
not just purchases)
• Commodity codes
• Monthly
•
What are
the
deadlines?
21st day of the following calendar month (e.g.
return covering import today must be done by 21
February 2014)
• Used to measure intra-EU trade
• Criminal regime

18. BUYING SERVICES - WHAT’S NEEDED
• Assume within “general B2B rule”
What do
you do?
What
returns
must you
make?
• Provide your UK VAT number so
VAT not charged
• VAT return only

19. GENERAL B2B RULE
• Cross-border services supplied by one
business to another
• No VAT charged by supplier
• Purchaser applies “reverse charge”
• Covers all services except:
• Land-related services , e.g. estate agent re specific
property
• Hiring means of transport
• Admissions to events

20. BUYING SERVICES – VAT
RETURNS
What
entries
are
needed?
(£100)
• Box 6 - £100
• Box 7 - £100
• Box 1 - £20 (=reverse charge)
• Box 4 - £20 (assumes you can claim all your
input tax)
• NB – not Box 9

21. SELLING GOODS – WHAT’S NEEDED
• UK vendor does not charge VAT provided:
•
What do
you do?
•
•
What
returns
must you
make?
Customer provides VAT number
with country prefix
Commercial evidence goods have left UK is obtained
within 3 months of the transaction
Invoice must state why VAT is not charged
• VAT return
• EC Sales List
• Intrastat “dispatches”
supplementary declaration

22. SELLING GOODS – VAT RETURNS
What
entries
are
needed?
(£100)
• Box 6 - £100
• Box 8 - £100

23. SELLING GOODS – EC SALES LISTS
What entries are
needed?
• Name, VAT number and amount sold to each EU VATregistered customer
• Scope for smaller exporters to make less detailed ESL
How often must you
make these returns?
• Monthly if annual sales of goods to
EU businesses > £35k
• Otherwise calendar quarterly
What are the deadlines?
• Due within 14 days (paper) or 21
days (electronic)
• Penalties for late or non-submission

24. SELLING GOODS – INTRASTAT
DISPATCHES
What
returns
must you
make?
What entries
are needed?
What are the
deadlines?
• EU “exports” > £250k in calendar year
•
Must be electronic
• Movements of goods only (but not just sales)
•
Commodity codes
•
21st day of the following calendar month (e.g. return
covering export today must be done by 21 February
2014)
• Criminal regime

25. SELLING SERVICES – WHAT’S
NEEDED
What do
you do?
What
returns
must you
make?
• UK supplier does not charge VAT provided satisfied
customer is in business outside UK (VAT number best
evidence)
• Invoice must state why VAT is not
charged
• VAT return
• EC Sales List

26. SELLING SERVICES – VAT RETURNS
What
entries
are
needed?
(£100)
• Box 6 - £100
• NB – not Box 8

27. SELLING SERVICES – EC SALES
LISTS
What entries
are needed?
• Same information as for goods
How often
must you
make these
returns?
• Calendar quarterly
What are
the
deadlines?
• If doing monthly returns for goods can do
services monthly too
• Due within 14 days (paper) or
21 days (electronic)
• Penalties for late or nonsubmission

28. INTRODUCTION TO VAT
These slides are intended for use in connection with the
presentation given on 22 January 2014. No action
should be taken on the basis of information contained in
these slides or in the presentation without obtaining
professional advice specific to the circumstances.
No responsibility for loss occasioned to any person
acting or refraining from action as a result of the material
in these slides or presentation can be accepted by the
speaker or by Terry Dockley & Co Ltd
Copyright 2014, Terry Dockley & Co Ltd