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Where Taxpayers and Advisers Meet
Points of Practice - VAT Tips
30/07/2005, by Mark McLaughlin CTA (Fellow) ATT TEP, Tax Articles - VAT & Excise Duties
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VAT Voice by Steve Allen

Three topical VAT tips, brought to you by VAT Solutions (UK) Ltd

1. Be prepared for HM Revenue & Customs checks on private use of mobile phones by employees

Businesses that provide their staff with mobile phones should ensure that they either reclaim only the input VAT on the ‘business’ element of the phone bills, or else pay output VAT on the ‘private’ element.

We issue this reminder on back of hearing that HM Revenue & Customs are asking some businesses to undertake sampling exercises to ensure that the VAT treatment of their mobile phone bills is correct. Forewarned is forearmed!

2. HM Revenue & Customs withdrawal of the ‘simple duplication of tax’ concession

As announced by HM Revenue & Customs last year, the concession that allowed ‘simple duplications of output tax’ to be reclaimed from HM Revenue & Customs no matter when they occurred, is being withdrawn from 1 July 2005. From that date, all repayments of overpaid tax will be subject to the ‘three year cap’, and only errors made on returns for periods ending during the last three years can be corrected.

3. VAT no longer due on any type of inducement payment?

Businesses that make payments to their customers to facilitate a transaction may now be able to save output VAT.

Further to the recent issue of Business Brief 12/05, and HM Revenue & Customs’ revised policy on the VAT liability of inducement payments made by landlords to tenants, we hear that the new policy is being applied to other inducement payments paid by other suppliers to customers.

If you are a business that pays another type of inducement, it may well be worthwhile writing to HM Revenue & Customs to get their formal agreement on its non-taxable treatment going forward.

July 2005

VAT Solutions (UK) Ltd
11 Winmarleigh Street,
Warrington,
WA1 1NB

(T) 01925 242497
(F) 01925 242498
(M) 07810 433927
(W) www.vatsolutions-uk.com

VAT Solutions (UK) Limited is an established independent firm of Chartered Tax Advisers, formed by Andrew Needham and Steve Allen. The company has a cross-section of clients from multi-national companies through to medium-sized and numerous smaller regional firms of accountants and solicitors. They produce a regular publication 'VAT Voice', which can be downloaded directly from the Internet via the following address: www.vatsolutions-uk.com/newsletter.doc

About The Author

Mark McLaughlin is a Fellow of the Chartered Institute of Taxation, a Fellow of the Association of Taxation Technicians, and a member of the Society of Trust and Estate Practitioners. From January 1998 until December 2018, Mark was a consultant in his own tax practice, Mark McLaughlin Associates, which provided tax consultancy and support services to professional firms throughout the UK.

He is a member of the Chartered Institute of Taxation’s Capital Gains Tax & Investment Income and Succession Taxes Sub-Committees.

Mark is editor and a co-author of HMRC Investigations Handbook (Bloomsbury Professional).

Mark is Chief Contributor to McLaughlin’s Tax Case Review, a monthly journal published by Tax Insider.

Mark is the Editor of the Core Tax Annuals (Bloomsbury Professional), and is a co-author of the ‘Inheritance Tax’ Annuals (Bloomsbury Professional).

Mark is Editor and a co-author of ‘Tax Planning’ (Bloomsbury Professional).

He is a co-author of ‘Ray & McLaughlin’s Practical IHT Planning’ (Bloomsbury Professional)

Mark is a Consultant Editor with Bloomsbury Professional, and co-author of ‘Incorporating and Disincorporating a Business’.

Mark has also written numerous articles for professional publications, including ‘Taxation’, ‘Tax Adviser’, ‘Tolley’s Practical Tax Newsletter’ and ‘Tax Journal’.

Mark is a Director of Tax Insider, and Editor of Tax Insider, Property Tax Insider and Business Tax Insider, which are monthly publications aimed at providing tax tips and tax saving ideas for taxpayers and professional advisers. He is also Editor of Tax Insider Professional, a monthly publication for professional practitioners.

Mark is also a tax lecturer, and has featured in online tax lectures for Tolley Seminars Online.

Mark co-founded TaxationWeb (www.taxationweb.co.uk) in 2002.

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