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Hi again, I hope you’re busy and that the order books for autumn are looking good. The VAT world is busy as always and I’ve been thinking about some of the most topical issues.
VAT, holding companies and acquisition costs: when it’s not enough to make taxable supplies
It’s normally understood that if you’re registered for VAT and make only taxable supplies, you can recover VAT on all of your costs. However HMRC recently confirmed R&C 32/14
http://tinyurl.com/plcjnj3 that VAT on acquisition costs can’t be recovered, even if the businesses acquired make taxable supplies, because the acquisition and ownership of shares in itself isn’t regarded as a business activity….http://tinyurl.com/mdhdarkWhat can you do if you’re convinced HMRC’s ruling is wrong?
I’m sure that we all dread those official looking letters in brown envelopes, especially when you’re expecting a decision from HMRC decision about whether you have to pay more VAT than you’d hoped. And if the ruling is not what you had hoped but you’re convinced that the ruling is technically wrong, what do you do? Well to begin with, you can ask HMRC to review their decision….http://tinyurl.com/mc862au
Management charges and other payments between associated businesses
By far the most popular page on http://www.vatexchange.co.uk is an article about payments between associated businesses. So much so that I’m now writing a book about the subject, which I’m hoping to publish in November. If if you have any suggestions for subjects or queries about the subject, now is the time to let me know, so please email me marie@vatexchange.co.uk.
Contractors, joint ventures, property development and a bit of “VAT speak”…
One of the most important factors in any commercial transaction is to establish what in VAT speak is called the “chain of supply”. This is VAT speak for: who is doing what for whom. You might think it’s quite clear who is the supplier is and who is the customer, but sometimes the use of certain industry terminology can obscure the issue. And unless you get this right from the start, it can cause some fundamental errors in VAT accounting.
It can be particularly confusing in property developments. For example, I’ve heard the terms “developer” and “joint venture” used in different situations…….http://tinyurl.com/or6hkl7
Next time I’ll be looking at the new place of supply rules for the sale of digital services to consumers in other EC countries. The new rules take effect on 1 January 2015, so you need to be getting ready now if you think that your business will be affected.
In the meantime, if you need help on any VAT issue, check out https://vatexchange.co.uk for details of our range or services, including free help on the VAT forums, special rates for professional advisors, one hour telephone consultation and our formal advisory services. Or email me marie@vatexchange.co.uk.
Marie
October 2014
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