Enter Your E-mail

VAT Voice by Steve Allen

Steve Allen, Director of VAT Solutions (UK) Ltd, comments on some VAT tips - provided by HM Revenue & Customs!

Comment

The following tips have been reproduced from the HMRC website. It would be interesting to see what you make of them, particularly with regard to complaints. On several occasions, we’ve had to send in a complaint about the Complaints Unit!

1. Making contact with HMRC and asking for advice.

HMRC has a National Advice Service helpline – 0845 010 9000 – open from 8am to 8pm, Monday to Friday. If you want any help or advice you can ring the helpline or, alternatively, you can find information on this site

2. Be clear about the impact of VAT on growing your business turnover.

Make sure your business plan looks at how you will deal with the impact of registering for VAT. For example, if you provide services to members of the public, registering for VAT may have major implications for your pricing structure.

3. If you do register for VAT, HMRC wants to work with you to help make the process as simple as possible.

Monitor your turnover so that you know when you are approaching the VAT registration threshold. Apply to register in plenty of time so that you have your VAT number when you need it. There are a number of schemes to make dealing with VAT easier. For example, the “cash accounting” scheme means that you only pay the VAT to HMRC after your customer has paid you. The “Flat Rate Scheme” can help reduce the time spent on VAT bookkeeping. When you register always ask what schemes are available to make paying your VAT easier.

4. Always keep your books up-to-date and check accounting documents.

Good book keeping is a vital part of good overall business management. It’s always better to spend those few extra minutes each day writing things up and filing them properly, rather than sorting out piles of documents at once. Always check documents you receive, for example, you must have a “VAT invoice” to claim back VAT – a “statement” is not a proper invoice. Always enter cash receipts in your books before using the cash to make purchases.

5. Always speak up if things go wrong or there’s something you don’t understand.

HMRC genuinely wants to help businesses get things right. If you find yourself unable to send your VAT Return or cheque on time, phone HMRC to tell them why. HMRC may be more sympathetic than you think if you have a good reason.

6. When giving HMRC information, always give the full facts and quote your VAT number.

To help honest businesses, HMRC needs the full facts when dealing with those businesses. If you write to HMRC always give the full facts – don’t write “don’t know” or “not yet decided” if the box asks for specific information. Always quote your VAT number on correspondence or delays will occur.

7. Manage the VAT within your business cashflow

Many businesses take advantage of the VAT they’ve collected, making it work for them before it has to be paid to HMRC. This can help reduce a business’s borrowing requirements and save you interest charges. But this has to be managed carefully. The VAT you have collected, less what you can reclaim, will have to be available to pay HMRC when your Return is due.

8. Don’t worry if HMRC make contact with you

Following these top ten tips you will help you get things right, meaning you need not worry about your VAT affairs. Consequently you should not worry if HMRC make contact with you. HMRC do contact businesses from time to time and they may want to visit your business. Don’t be concerned if HMRC visit you, they will tell you why they want to visit and what information they will want to see.

9 If you’re in doubt – Shout!

The golden rule is – if you’re not sure ask. HMRC would much rather be asked any number of questions than for you to make a mistake because you’re not sure what to do. It is in the interests of both HMRC and the business to get things right from the start, if you’re in doubt – shout!

10. If, at the end of the day, you’re not happy with HMRC – complain

If you are unhappy about the way HMRC has dealt with you, they want to know about it so they can try to put things right. HMRC has an effective complaints system through which your concerns can be investigated, and they encourage you to use it where you remain unhappy. HMRC aims to respond within 10 working days, and if they can't, tell you why and let you know when they will reply in full. More details can be found on this site.

November 2006

Steve Allen
Director, VAT Solutions (UK) Ltd
Email: steveallen@vatsolutions-uk.com


VAT Solutions (UK) Ltd
1 Dundonald Avenue
Stockton Heath
Warrington
WA4 6JT

(T) 01925 212244
(F) 01925 212255
(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 their website.