Someone asked me recently why I can never give a simple one line answer to a question on the forums. And I explained that there is a good reason. It is this.
The guidance that I give on the forums can only ever be general advice about the subject concerned because I only ever have limited information from the person who has posted the question. The odd thing as far as VAT is concerned is that to give a simple reply I normally need LOTS of information. This would include reading contracts relating to the transactions concerned before I could reach a definitive conclusion.
When you are working with limited information, the best way of giving helpful advice is to explain the general VAT rule about the subject concerned and then tell the questioner where to find more information so that they can find their own answer. I always do my best to say what I think that the answer is but at the end of the day, the best I can do is to point people in what I think is the right direction so that they can reach their own conclusions.
There is one other very fundamental reason. After 25 years of being in the VAT profession, one of the most important things I’ve learnt is that somebody’s description of a transaction can often differ considerably from what is in the contract. So I can’t take the information given in the question at face value – which is why I always say “based on the information you’ve given” or words to that effect because the question itself might be “wrong”, if you see what I mean.
One of the best examples of this is the use of the term “agent” – it can be used in so many different ways and can be completely misleading. And then of course there is property stuff – this is the one area of VAT where I think that you should always take formal professional advice. The amounts involved can be significant and simple errors – such as the difference between exempt and zero-rated – can make the difference between a transaction being profitable or making a loss. Even if I tell you where to look for information on the HMRC website, with limited knowledge of the subject you can easily reach the wrong conclusion. You wouldn’t thank anyone for an oversimplified answer now if it means that in a couple of years time you have the VAT officer breathing down your neck with a VAT assessment that could have been avoided if you’d invested in some proper advice.
I really enjoy answering the questions on the forums. It gives me a chance to double check technical points and makes me think about the practical implications of an issue, which are often overlooked when the contract is being agreed. But there are times when you really should take formal advice, whether from me or another qualified VAT consultant. In these cases, I will tell you in the strongest of terms. And you really should heed my advice when I say this, because the cost of getting it wrong is really too high.
Anyway this has felt like a long tiring week and I’m pleased that it’s Friday afternoon. The sun is shining here in Leeds and hopefully we’ll have at least one decent sunny day over the weekend. So get outside and make the most of the sun!
Marie