In the age of computerised accounting packages and online platforms for completing returns this is a reasonable question.
A big part of the answer is our knowledge of legislation, and how we can apply our knowledge to benefit those who we work with. A great example of this has been highlighted recently by Accountingweb, where HMRC have changed an interpretation of long standing VAT legislation which could have a significant impact on businesses who don’t take alternative advice, costing them £’000’s.
When an established business registers for VAT it will already hold some stock and assets which will be used after the registration date in connection with its VATable sales. For the last 43 years, the trader has been able to reclaim all the input VAT paid on those goods, in his first VAT return, as long as these conditions are met:
– the goods were acquired in the four years before the date of registration
– the items are still held at the date of registration.
The law has not changed, however, if you now ring the VAT helpline you may be told you can’t reclaim all of the input VAT paid on those goods. HMRC says the input VAT should be reduced to take into account the use that has been made of the goods before the VAT registration date, which could cost the taxpayer thousands of pounds.
With the introduction of the simplified Gov.uk website, there are other examples of where HMRC are giving their interpretation of the legislation, rather than giving the reader the rules to read and interpret and apply themselves.
By working with an experienced and knowledgeable advisor (such as our team at Morrell Middleton) we will consider factors such as previous case law and best and common practice, to give the best interpretation of the legislation for you, so that the rules work for you rather than against you.