VAT Blog
Latest news, thoughts and articles from the world of VAT.
New guidance on “Occupation” following Newnham College
HMRC have issued new guidance on the meaning of "occupation" following the House of Lords judgement in Newnham College, which went in favour of the taxpayer. HMRC has accepted that mere physical presence alone is not sufficient to qualify as "occupation" - it must be...
Exempt or Zero?
This is a bit of a techie blog, but the subject is so fundamental that it deserves to be blogged about. What is an obvious exam question about VAT? How about this: “Explain the difference between VAT exempt supplies and taxable supplies. Please demonstrate with...
Flooring/construction VAT
Q: We're a flooring company currently working on a new build supplying and installing carpet and vinyl. Do we charge vat on everything or only on the carpet as vinyl is classed as part of the building, what about the labour part of fitting the vinyl? Many thanks A: Hi...
VAT on subscriptions
Q: I am a start up company, only recently registered for VAT. I am adding a subscription based membership to my website. I have searched through the government website and cannot find any information about VAT on subscriptions, other than that for charities. My...
Reclaiming VAT from start up costs
Q: Hi WE have set up a limited company and have registered for VAT shortly afterwards. We are a claims management company who charge clients an application fee if they would like to do a claim with us. Firsty I am correct in thinking that application fee's are VAT...
Is a Pringle a cake or a crisp?
Just when you thought VAT couldn’t be any more ridiculous, then comes along the Pringles case! Now the VAT liability of foodstuffs is ridiculously complicated with some things being standard rated and some zero-rated. The legislation on food is written in the most...
Changes to the VAT Partial Exemption Standard Method
Just before the budget last month, HMRC announced a number of changes to the partial exemption standard method which are worthy of a comment. They apply to VAT returns for periods commencing on or after 1 April 2009. Practical changes for existing partly exempt...
Compound Interest case upheld, Option to Tax rules, Tour Operators Margin Scheme
HMRC have recently issued VAT Information Sheet 06/09 here http://www.hmrc.gov.uk/news/index.htm on their newspage which gives detail about the new automatic permission rules for opting to tax certain properties. See also my blog here https://vatexchange.co.uk/blog/4...
Do I need to register?
Q: I hope someone can help clarify this lingering issue for me. I am about to embark on a new project. I have a UK company which will be buying merchandise from an EU based company and selling to an non-EU company. The merchandise never enters the UK. It is shipped...
VAT and Digital Music Sales
Q: Hi All, I'm trying to figure how VAT will work in the following scenario, and... scrambling my brain in doing so. First I'll lay out the parties involved. The Service Provider: The company that makes available an e-commerce platform for the sale of digital...
Builder charged VAT on materials, but is not VAT registered
Q: I have had some building work done and the builder has issued invoices which show a VAT number. Before he started he said he was de-registering for vat and we wouldn't have to pay it. Some invoices we have paid in cash and there is no vat on the invoices. Some...
VAT registration query
Q: I run a small business from home as a Sole Trader and not VAT registered.When I buy stock from my suppliers I obviously pay VAT but what should happen when I sell the stock on to my customers?I don't show any VAT on invoices/receipts but the amount I charge equates...
VAT Return problem
Q: I submitted my 1st VAT return in Feb 09 and so far have not been paid for that return, an officer called me claiming to want to visit to verify the claim, when he did get here he was accompanied by another officer, they were here in total 3 hours askign allsorts of...
Additional REsources
A Few Other Resources We’ve Created for Our Customers
Intercompany services, management charges and overhead costs.
Article: VAT on Intercompany services, management charges and overhead costs. One of the most common VAT queries is whether VAT should be added to intercompany services, management charges and overhead costs; typically the charges made by a parent company to...
The VAT 1614D procedure: the FAQs
The VAT1614D prodecure: the FAQs. If you’re buying an old barn or pub to convert into your home, or buying an office block to convert into luxury apartments, you can avoid (legally!!) paying VAT on the purchase even if the vendor has opted to tax the property. How?...
VAT, cost sharing and disbursements and when to charge VAT
VAT, cost sharing and disbursements and when to charge VAT: One of the most common areas of confusion when sharing costs between associated businesses is whether or not you have to charge VAT. Typical examples would be when one group company contracts with third party...