When should I be considering VAT?
Any business can have a VAT issue at any time, however, there are certain events where VAT advice is particularly required. Some examples are, when:
- Any changes to a business occur; from selling new products to acquisitions, share sales, disposals, re-structuring, and ceasing to trade
- Any land and property transaction, eg; building, buying, selling, letting, developing, refurbishment, moving business premises etc (please see Land & Property in Services)
- Any exempt income is received by a business, eg via; land and property, financial services, insurance, education, health and welfare etc
- Any international or cross-border supplies of goods or services are provided or received (please see International in Services)
- Any unhelpful rulings or directions from HM Revenue & Customs are received
- Any unusual or one-off transactions are undertaken
- A VAT inspection or investigation is known to be due
- A due diligence exercise is required
- Disputes between suppliers/customers
- An indication or feeling that a business is paying more VAT than it should be.
- A VAT group is in place or being considered.
- If a business is insolvent
- If any “non-business” income is received, eg; income received by non-profit making bodies on which there is no VAT (please see Charities in Services)
- If not all input tax is being recovered
- VAT cannot be paid to HMRC.
And don’t forget of course, the more obvious, perennial issues: The treatment of cars and fuel, business entertainment, tax points (accounting for, and claiming VAT at the appropriate time), marketing schemes, used goods schemes, other special VAT schemes, start-up costs, bad debt claims, grants, vouchers, discounts, and of course, registration.
It is also worth bearing in mind the famous quote about VAT by Seadley LJ in the Royal Sun Alliance Group v CCE case; “Beyond the everyday world lies the world of VAT; a kind of fiscal theme park in which factual and legal realities are suspended or inverted”. Businesses are expected to deal with this sort of thing on a daily basis!
We are here to help and we are determined to get the best deal for our clients, especially if there are any unfounded allegations.
Are you aware how changes in EC and UK legislation, developing case law and Budget changes affect your business? Did you know that in the past few years many industry sectors have been able to claim back many millions in overpaid VAT? HMRC always move quickly to remove these opportunities and there is a four-year cap – so the window in which to lodge claims is often limited. Our clients are informed if there are any VAT developments, which affect them, and this recognition and notification increases a business’s chances of a successful and maximised claim.
VAT is a self-assessing tax and the onus is on a business to get it right (and at the right time). The penalties for even innocent errors are draconian and may put the continuing existence of a business in doubt. HMRC have wide-ranging powers and are not reticent about using them. Consequently, the necessity of accurate, timely and proactive advice has never been greater.
Marcus Ward Consultancy Ltd offers an extensive service including solutions to ad-hoc issues, healthchecks, negotiation, full reviews, training, dispute resolution, planning and representation at Tribunals.