We have been approached by a new client who is VAT registered, and their business activity is the hire of audio visual equipment. They are looking to invoice a Canadian music company for the hire of sound and lighting equipment.

Client is adamant that their car dealer has advised them that VAT incurred on the purchase of an electric car is recoverable in full.

My client has a gift shop with a gallery selling artworks on behalf of local artists, some of whom are registered for VAT. We charge commission on sales; on what values do we declare VAT?

My client has been asked to supply footballs for use by a youth team in Kenya. They will deliver direct to the shipper, but will invoice a UK charity. Please could you confirm whether they can zero-rate the sale under the export rules?

My client is an independent mortgage advisor, who is not VAT registered. Her turnover is above £85,000 and all of her income is either commission, which is paid by UK lenders, and flat fees received from customers seeking a mortgage. (more…)

My client recently purchased an empty 3 bedroom bungalow that hasn’t been lived in for 4 years. He intends to spend £30k extending and refurbishing the property into a 4 bedroom house, which he and his family will move in to. (more…)

My client is a car dealer and operates the margin scheme. He has purchased a classic car which is a collectors’ item and has imported the car into the UK from the US. I understand that the car was involved in some historic event in the US. My client has been told that he can sell the car at the reduced rate of 5%. Is this correct?
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My client purchased a car for use in her business, which the dealer said was a qualifying car. My client took this to mean that she can recover the VAT but I disagree. Obviously my view has not gone down well with the client, but am I correct?
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One of my clients deregistered recently and has now received a letter from HMRC asking about a property that he bought four years ago for £150,000 and opted to tax. Although there was no VAT chargeable on the purchase, the property was empty at the time and in quite a poor condition as the seller was reluctant to spend money on it, so my client also spent £100,000 doing it up ready to let out. He opted to tax so that he would be able to recover the VAT on this refurbishment, and until deregistering has charged VAT on the rent. What does he need to do? As he has already cancelled his registration is he going to receive a huge assessment? The property is now worth around £300,000.
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Are Jaffa Cakes biscuits or, as the name implies, cakes?
This question is one of the most famous examples of the kind of debate that happens frequently in the world of VAT because precise definitions can make the difference between sink or swim for businesses that sell the products under discussion. (more…)

Good news for the Construction Industry (more…)

My client is planning major renovations to her home to make it more “eco-friendly”. This will involve the installation of a number of energy-saving materials such as solar panels, insulation, and an air source pump to provide both heating and cooling functions. However, she has heard there are imminent changes to the VAT treatment of such supplies and is concerned she may miss out on current VAT reliefs. Please could you clarify? (more…)

My client is an insurance company, they are VAT registered and partially exempt (85% exempt/15% taxable). They have invested £200,000 in bespoke computer software. The software was written for them by an Israeli company, who are renowned leaders in software security. HMRC have recently inspected the insurance business and made an assessment of £34,000. My client is confused as to how they have a VAT assessment on an invoice that didn’t even have any VAT on it. (more…)

My client is an amateur dramatic society operating via a company limited by guarantee. They own their own premises and charge admissions to their productions. The admissions have grown to £80,000 in the last 12 months, and alongside this income, they have £20,000 from bar sales and they also occasionally perform at other theatres. They don’t control the box office for these performances at other theatres; instead, they are paid a fixed fee by the theatre for performing, and income from this is £10,000. As their total sales are now £110,000 for the last 12 months, I’m assuming they have to register for VAT? (more…)

I have recently been reading up about the domestic reverse charge for construction services which comes in in October 2019, including the helpful VQOTW (14 June 2019), but this has got me wondering whether there are any other reverse charges in the UK I should be aware of, and why they are increasingly being used by HMRC? (more…)

And upcoming changes for reverse charge VAT.
Few sectors have such an impact in the UK as the construction industry. It not only provides the fabric of our nation – the places where we live and work – but also underpins our entire economy. (more…)