VAT

VQOTW: DISTANCE SELLING IN THE EU

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My client is a small retailer specialising in bespoke leather goods, and all sales to date have been within the UK. In order to expand her customer base, she is launching a website and planning to sell through Amazon. Are there any VAT consequences she needs to consider?

VQOTW: DISTANCE SELLING IN THE EU

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My client is a small retailer specialising in bespoke leather goods, and all sales to date have been within the UK. In order to expand her customer base, she is launching a website and planning to sell through Amazon. Are there any VAT consequences she needs to consider?

VQOTW: DEREGISTERING WHERE THE TRADING PREMISES HAS BEEN OPTED UNNECESSARILY

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My client is a small independent retailer selling mobile phones and accessories, with turnover below the VAT registration threshold. Last year, in September 2018, they bought the premises they were occupying from their landlord. The landlord had opted to tax and the purchase price was £100,000 plus VAT. In order to recover the VAT, the client VAT registered and notified their own option to tax. The client’s turnover has remained below the threshold, and they have asked me whether they can deregister, and what the consequences of that would be.

VQOTW: PRIVATE TUITION

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My client is a Limited Company and runs a swim school, teaching children. The client’s turnover is close to £85,000. I would like to confirm that my client is making exempt supplies of education and therefore does not need to VAT register.

VQOTW: HOME OFFICE

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My client is the director of an interior design company. The company rents a small unit for storing stock, but this space is not really suitable for use as an office. She is exploring the possibility of having a home-office erected in her garden. Could you please advise on the VAT recoverability of such a project?

VQOTW: FLAT RATE PRE-REGISTRATION VAT

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My client is about to register for VAT and wants to use the flat rate scheme as she meets the conditions and it would be beneficial to her. However, her intention is to register for normal VAT initially, in order to recover pre-registration input tax, and then after the first return has been filed, switch to the flat rate scheme. Is this acceptable or will HMRC challenge it?

VQOTW: MTD AND CASH ACCOUNTING

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My client is a wedding and party planner, and is compulsorily VAT registered operating the cash accounting scheme. Their current system is not particularly sophisticated and they only operate using a manual cashbook. I am in the process of ensuring they are MTD compliant for their 07/19 return, but want to keep things as simple as possible for them. Can they continue to operate a cashbook in a spreadsheet format and submit via bridging software?

VQOTW: 28 DAY RULE

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My client runs a small bed and breakfast and a furnished apartment which to date has been let on an Airbnb basis with a daily linen change and cleaning service. Normally she would account for VAT on all of these stays. Now she has received an enquiry from a construction company about exclusive use of both for a period of 12 months to house some of its employees working away from home. Should she still charge VAT?

VQOTW: INPUT TAX ON RE-REGISTERING FOR VAT

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My client is a bathroom fitter and was VAT registered from January 2017 to March 2018 as he had a contract with a large developer to fit en-suites into new-build dwellings. His supplies were mostly zero-rated and he received repayments of VAT from HMRC. He bought a new commercial vehicle and specialist tooling in August 2016 on which he recovered the VAT as pre-registration input tax. On his final return, for the tax period ending 31st March 2018, he accounted for VAT on all the assets and stock on hand as a deemed supply.

Registering For Making Tax Digital For VAT

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The moment has come: if your business has a taxable turnover above the VAT-registration threshold, which is currently £85,000, you’re now obliged to keep records in digital form and to file your VAT returns using HMRC-approved software.

VQOTW: BUILDING MATERIALS

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My client is a builders’ merchant and has supplied steel sheets to a customer who is building his own home. The customer has provided my client with a copy of the planning consent supporting the demolition of an existing property and the construction of a new dwelling. Can my client zero-rate the supply of the steel?

VQOTW: CHARITY FUNDRAISING

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Over the last few years, my client and a couple of his friends have run a small local beer and cider festival; any profits they make are given to local charities. They sell a few tickets in advance and have sponsorship/advertising income, but most sales occur on the day of the event. In the last few years, they have been below the VAT registration threshold, but with the number of people attending increasing year on year and the wonderful summer we had in 2018, they did exceed the VAT registration threshold by £800. As all the profits are donated to charity, can the client benefit from the charity fundraising exemption?

VQOTW: ONLINE TRADERS SELLING TO GERMANY USING AMAZON

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My client is an online retailer, selling through Amazon and other online marketplaces. They have recently received correspondence from Amazon with regard to the online sales they make to customers in Germany. It appears that Amazon is insisting that my client must VAT register in Germany if they want to continue to sell to German customers via Amazon. Can you advise what has prompted this action?

VQOTW: CHANGE IN POLICY FOR RETAINED DEPOSITS

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My client and her husband run a boutique hotel in partnership. Due to the location and quirky nature of the décor, they are increasingly getting requests to host celebrations and parties in addition to overnight accommodation. As the financial outlay in preparing and staging the events can be quite considerable, the client asks for a 25% deposit up-front, which is non-refundable if the event is cancelled. Please, could you advise on the VAT treatment and time of supply implications of these deposit payments?

VQOTW: VAT VOUCHER CHANGES

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My clients own a hair and beauty salon and have recently started to issue their own gift vouchers. I understand that the VAT treatment depends on the type of voucher, and also that there have been some recent changes. Please, could you clarify?

VQOTW: SALE OF BUSINESS ASSETS

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My client is changing his business policy with respect to vehicles so that in future vehicles will be leased on contract-hire instead of owned by the company. Several employees are interested in buying the old vehicles. Will he need to charge VAT on the sale of those vehicles to the employees?

Deregistering for VAT

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These days VAT thresholds are the subject of much speculation, with the Government concerned that many business owners deliberately choose to stay below the VAT-registration threshold.

Limiting your ambition in this way might seem counter-intuitive – surely you want your business to get as big as possible?

VQOTW: WHAT DO HMRC MEAN BY TAXABLE TURNOVER FOR MAKING TAX DIGITAL

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My client works through her own limited company, providing public relations and marketing consultancy to businesses in the UK and all over the world. The business is VAT registered in the UK on a voluntary basis; is she going to be affected by Making Tax Digital?

VQOTW: AGRICULTURAL FLAT-RATE SCHEME

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We have a client who runs a plant nursery and claims that he is exempt from registering for VAT as the business falls under market gardening. I have searched HMRC’s website but can find nothing on this subject. Is he correct?

VAT Question of the Week: Input VAT – Too Late to Claim?

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My client has been approached by a builder, who carried out repair work to the client’s factory some years ago. The builder was late registering for VAT and is now looking to issue VAT only invoices to my client for the supplies in question. I have several concerns: is the supplier liable to account for the VAT if the supplies were made more than 4 years ago? Is my client obliged to pay and if so can he now recover the VAT given that the original invoices were dated more than 4 years ago?

Vat Question of the Week: Sale of Trading Premises

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My client, a small owner-managed company, purchased five-year-old freehold premises to trade from in June 2017. The total cost of the premises and refurbishment was 180K + VAT, which the company reclaimed in full in the 06/17 period, and the company has occupied it since for its engineering business. The business has always been fully taxable.

VAT Question of the Week: Hotel Deposits

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My client frequently has to stay in hotels for business. The hotel takes a deposit at the time of booking with the balance of the cost paid over when the stay takes place. Sometimes my client’s plans, or those of his customer, change and he cancels the booking and the hotel keeps the deposit paid. Some hotels send a VAT invoice covering the amount of the deposit they retain after the cancellation and some say that they cannot issue a VAT invoice because VAT is not applicable to the amount they have retained. Which is correct for VAT purposes?

MTD for VAT-registered businesses

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Obligations from 1 April 2019 onwards.

Although the Making Tax Digital (MTD) regime has suffered several setbacks and delays, MTD for VAT remains on course to take effect from its planned implementation date of 1 April 2019.

Under the scheme, VAT-registered businesses are required to maintain digital records, complete the VAT return from the digital records and send it electronically to HMRC.

Read the full article here.