The VAT Consultancy

A supply made after 4 January 2011 will carry VAT at 20%. Or will it?

2010-08-18T16:21:00.006+01:00

It has been well publicised that the standard rate of VAT will increase to 20% on 4 January 2011. This means that all supplies made on or after this date will be subject to the 20% rate of VAT. Or will it?

It is still possible to secure the 17.5% rate of VAT for supplies made on or after 4 January 2011, as long as the provisions of the anti-forestalling legislation are not breached.

HMRC consider that anti-forestalling occurs when arrangements are put in place for a VAT invoice to be issued by a supplier or payment received by a supplier before the rate increase where goods are not due to be delivered or services to be delivered until after the rate increase.

However, the current rate of 17.5% can still apply where an advance payment is made or an invoice is issued in advance of 4 January 2011 (to be paid within a maximum period of 6 months), given the following circumstances: -

· the supply must be valued at £100,000 or less

· the supplier and customer must not be connected parties, and

· the supplier (or someone connected with the supplier) must not provide any finance.

The anti-forestalling legislation does not apply where the supply is being made to a business which is able to fully recover the VAT charged through its own VAT return.

There is scope to mitigate the impact of the rate increase – but businesses need to tread carefully to ensure that they do not fall foul of the anti-forestalling provisions.

If you are in any doubt, do contact us here at The VAT Consultancy and ask to speak to a consultant.

Good News for Business Travel Agents!

2010-08-12T10:15:00.006+01:00

We have recently received agreement from HMRC, that Revenue & Customs Brief 21/10 on “bill-back” arrangements, works for overseas clients.

So, if you are a UK agent arranging UK business travel, for clients anywhere in the world, the service provider’s invoice can be issued “c/o” you!

Your statement or payment request to the client, can then be used by the client as evidence for 8th or 13th Directive refund claims.

All much easier for the foreign customer – keeping time and paperwork to a minimum for them.

You can find out more about our VAT services for the travel industry by clicking here.

Time to Pay Agreements - HMRC getting tougher?

2010-08-06T14:47:00.003+01:00

As a quick reminder, a 'Time to Pay' Agreement is an agreed payment plan with HMRC to pay VAT debts (as well as other taxes).

An initial call to HMRC’s Payment Support Service on Tel 0845 302 1435 is required (before a demand for payment is received). They will ask initial questions regarding how much the debt is, how long you wish to pay this over etc. It is likely they will request some further documentary evidence to support any proposals put forward.

We have recently renegotiated some TTP agreements where uncontrollable factors have meant client's are unable to stick with the original agreement. Be warned though that HMRC's patience will run out if this occurs regularly and they will resort to legal action!

Recent press has suggested that HMRC are getting tougher on agreeing TTP agreements - we would be interested to know what everyone is experiencing out there.......

Flat Rate Ready Reckoner

2010-07-22T16:14:00.004+01:00

I have just responded to a query in Taxation magazine regarding someone who is using the Flat Rate Scheme.

The person in question is undertaking personal tax returns for UK and US individuals and has registered under accounting and bookkeeping services. Interestingly, they raise the question as to whether they should really be under 'other business services' which is a lower rate.

To help them decide what HMRC deem to be included within each of these headings they called the ever helpful VAT Helpline - only to be told it is a self-assessed tax!

Our answer to the query? It is simple when the under-used Flat Rate Ready Reckoner on HMRC's website is referred to. This helpful tool provides examples of which trades HMRC believe fit within these sector headings. Under 'Accountancy and Bookkeeping' they include 'income tax preparation services'. The case for a lower rate in this example is closed!

Do bear in mind however that accounting services to US individuals will be outside the scope and therefore not form part of the flat rate income....

Link to ready reckoner:
http://vatreadyreckoner.hmrc.gov.uk/HMC?cmd=sector&action=list&?rnd=76917384

The new VAT issues facing the Public Sector

2010-07-16T11:45:00.010+01:00

There are changing times ahead in the Public Sector, so I have taken the opportunity to sit down with Steve McIntyre our Public Sector Director to get his thoughts. Here's what he had to say:

Many of the public spending decisions and initiatives being announced by the Coalition Government are bound to have VAT implications. History shows us that VAT can have a major impact on Government plans, and strategies to deal with this had to be put in place.

For example; a concession was introduced to deal with problems on the zero-rating of wave 1 Acadamies, then further waves have been built using Local Authority peppercorn arrangements. Children's Centres also posed VAT recovery problems when the budget for them was first passed to Local Authorities.

I think that the following initiatives are likely to cause VAT headaches in the coming months;

State funded independent schools - like academies, these are likely to be charities or trusts and therefore will come within the restrictive charity VAT rules - zero-rating of capital projects only available to a new build or annexe. VAT registration may also be required if business activities are undertaken.

Cancellation of BSF - The Governments capital plans to replace BSF have yet to be announced, but there are indications that existing empty commercial/retail premises may be used to create "education space". Again, there could be VAT problems for the new independent schools and trust schools.

Further Out-Sourcing - I think that there could be a new phase of out-sourcing projects as severe cuts to Local Authority budgets materialise over the coming years. VAT savings can be made on certain services, such as Sport and Leisure moving into a trust, but other areas may incur additional VAT costs which need to be taken into account. Also, there can be some complex land and property transactions involved where VAT, again, becomes an issue.

As always with VAT I would always recommend the earlier these issues are discussed and addressed the better - VAT is a transaction tax and therefore it can often be too late to remedy things once a supply takes place.

Don't forget to file and pay your VAT online!

2010-07-06T14:45:00.007+01:00

With first quarterly returns due to be filed online on 7 August 2010, HMRC are reminding businesses of the mandatory requirement to file and pay their VAT online.

Click here for more

Were you suprised at today's VAT rate increase?

2010-06-22T17:49:00.005+01:00

When we looked into our crystal ball a couple of months ago we predicted that the rate of VAT would rise to 20%. What we didn't expect was that it wouldn't come into effect for another 6 months. So, today's news from the Chancellor that the rate of VAT will not go up until 4 January 2011 has come as quite a surprise to us all.

The majority of people who took part in our Budget Survey agreed that the rate would be rising to 20% within 3 months of the announcement, only 6% thought it would be the New Year. And, with this increase in VAT set to raise £13 billion in revenue, we all believe this will go someway to reducing the national deficit.

So, there we have it, we now know that the rate won't be increasing for some 6 months, some temporary relief for the consumer, however, we must remain mindful that an increase is just around the corner and there is still the potential for further rises to the rate of VAT.

In response to today's news, John Crawford, our Managing Director comments: "Such a rise will mitigate the bitter medicine of spending cuts and deferring the rise until next year in the hope of stimulating consumer demand will give time for businesses to prepare – important since many are still fighting for their lives.

Whether registered for VAT or not, businesses will pay more for their goods and materials. Either they subsume those costs and reduce their margins, or they raise their prices.
As ever, consumers will pick up the tab in any increase passed on in the supply chain when they buy the affected goods and services.
If you are going to have to spend 2.5% more on your big ticket VAT items, it makes sense to buy them before the end of the year."

Look out later for full details of the changes to VAT in our budget newsletter.

John's in demand as VAT rate rise is announced!

2010-06-22T15:15:00.008+01:00

With the announcement today that the rate of VAT will be rising to 20% on 4th January 2011, our Managing Director is having a busy day today responding to the news with our local TV and radio stations.

You can listen to him on:

3.30pm BBC Radio Gloucester on FM - 104.7, 95.8, 95, AM - 1413
http://www.bbc.co.uk/iplayer/playlive/bbc_radio_gloucestershire/

5.00pm BBC Radio Solent on FM 96.1 & 103.8
http://www.bbc.co.uk/iplayer/playlive/bbc_radio_solent/

5.45pm BBC Radio Bristol on 94.9, 103.6, 104.6, AM - 1548
http://www.bbc.co.uk/iplayer/playlive/bbc_radio_bristol/

6.30pm Points West, BBC One (West only)
If you live outside of the West area, then you can view this on Sky Channel 986

The importance of charging VAT correctly!

2010-06-18T13:02:00.009+01:00

A case has come to our attention this week regarding a refused DIY Housebuilder's claim.

The taxpayer paid VAT to a builder on a new build dwelling thinking they could reclaim the VAT from HMRC. HMRC refused as the VAT was incorrectly charged (zero rate applicable to new build), the taxpayer needed to get credit from their builders’ yet two of his suppliers had refused to refund.

The Tribunal agreed with HMRC that it was not up to HMRC to refund VAT incorrectly charged. This confirms again that VAT incorrectly charged CANNOT be reclaimed from HMRC.

You have been warned....

The Top 5 VAT pitfalls of developing a listed property and how to avoid them

2010-06-08T13:13:00.004+01:00

Read my new blog for Country Life Magazine:

http://tinyurl.com/2u43836

Next time I'll be talking about discuss specific technical terms and what they mean for a property owner.

The VAT News June 2010

2010-06-08T12:53:00.008+01:00

The June Newsletter is now available on our website. In this issue:

Budget June 2010 - what will it hold in store for VAT?

Our survey said... - what do you think will happen to the rate of VAT? Take part in our quick survey and you could win a bottle of champagne

Even more ways to talk to us - join us on Facebook, Twitter and LinkedIn

HMRC News round-up

News from the Tribunals

Jobs for the month

Click here to read more...

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The VAT News May 2010

2010-05-14T11:13:00.003+01:00

Our latest newsletter is now available including a round-up of all HMRC & Tribunal news, the latest on input VAT recovery on postal services and an in-depth look at the Flat Rate Scheme.

Read it here

Stakes rise on VAT rate rise

2010-05-13T11:14:00.005+01:00

It would be difficult not to notice the media interest today in a VAT rate rise being on the cards.

The prediction is that the standard rate will rise to 20% by the end of 2011, with analysts calculating this bringing in an extra £11.5bn per year, it is easy to see why this is likely given the current national debt levels.

It is even less surprising when you note that 63% of EU countries already have a VAT rate of 20% or higher, and 85% have a higher rate than the current UK rate of 17.5%. All in all is seems we have had it easy here in the UK!

As an aside, maybe the new government will also consider bringing back the 'Window Tax' from the 1700's to increase revenue. There was a flat rate for each house and a higher rate for houses with 10 or more windows - now that would be something to write about!

We will of course get you updated if the rate does change - keep an eye on our website or sign up to our newsletter.....

It's No April Fool!

2010-04-01T13:00:00.009+01:00

HMRC's new "failure to notify" penalty comes into force today, forget to tell them that you should be registered for VAT and you certainly won't be laughing.

Penalties for this range from 30% to 100% of the VAT not paid, and, that's dependent on how "careful" HMRC think you've been.

Find out more....

Flat Rate Flattens Profits

2010-03-05T09:27:00.001Z

I started this blog with my favourite scheme the flat rate scheme which is still not used enough, in my opinion, by many traders who could benefit from it.

Having said that, an article in the national press today appears to demonise the scheme for certain retailer's, namely those in the children's clothing sector.

Read the article with caution, as although the article suggests a 'stealth tax' has been introduced on the small children's clothing retailers' using the scheme, in my opinion they are failing to see how well off they still are under this scheme.

As a simple re-cap, the scheme means that no input VAT is recovered, but a specified percentage is paid over to HMRC on sales. 'Sales' for this purpose will include exempt zero rated sales. The 'specified' percentage varies depending on the industry you are in, it was 2% for children's clothing retailers', now it stands at 3.5%.

It must of course feel like these retailer's have been stung, losing 1.5% of their income suddenly. However, there are a couple of points to consider:

1) If the retailer was only selling zero rated children's clothes then the scheme is not for them anyway

2) If the scheme is deemed suitable for them, they have enjoyed one of the lowest flat rates for many years and still do AND they are still using a beneficial scheme. Rather than looking at the glass half full they should focus on the positive angle that they could be worse off if the scheme was scrapped completely.

HMRC v All Football Clubs

2010-02-05T12:07:00.001Z

Portsmouth has rumored to be on the brink of being wound-up by HMRC following failure to pay its tax liabilities. This is the latest club being chased down by HMRC who are certainly holding no prisoners. Back in July last year HMRC served a winding-up petition on King’s Lynn, showing they will chase non League and League teams alike. It is questionable whether it is the money or the principle that HMRC are after!

Portsmouth FC are said to be “shocked and surprised this action has been taken in respect of VAT, PAYE and National Insurance Contributions which either have been, or are about to be paid, or are disputed”. Although on this blog I may sometimes question HMRC’s approach, you do have to question with football clubs, just maybe if they didn’t pay their players so much and factored in the tax bills (which are not unexpected ones) they could simply manage their cash flows just a little better! Here I think I am treading on dangerous ground and I may open a football debate rather than a VAT one – so let’s move on.....

On a serious note, more and more of our commercial clients are finding HMRC going for winding-up order once a ‘Time to Pay’ agreement is broken. Commercial businesses that struggle to pay due to their customers struggling to pay due to their customers struggling and so on. The failure to pay therefore stems from real cash flow issue rather than greed. There seems no scope to negotiate, despite the economic climate and the previous promises that HMRC will strive to help businesses through the recession, we have to ask whether the reality is anything like the press releases HMRC ever issue!

The problem certainly stems from the change in the ‘preferred creditors’ status of HMRC on insolvency orders, but the recent heavy tactics makes me cynically question (and yes that is most unlike me to be cynical about HMRC), but are Debt Management Unit Officers simply told to panic that they will get nothing if they leave a company to try to struggle through the recession and the risk doesn’t pay off? Yes, HMRC are not a bank, but are they not part of what should be helping to keep this economy going, taking a risk therefore that UK businesses can eventually ride this recession out........ ?

Money in taxpayers pocket please....

2009-12-09T10:38:00.004Z

Over the last couple of years we have seen an increase in HMRC refusing monthly returns for new traders. In the main they say they will allow it after 12 months trading, but how is this useful to repayment traders starting out in business? In amongst the increase in 'Time to Pay' agreements, you would have thought they might just have decided to allow monthly returns to improve cashflow of businesses, therefore not putting themn under financial strain to need a Time to Pay, but clearly this doesn't make election winning headlines!

A recent case we have had here involved a TOGC (transfer of a going concern) of a repayment business. The vendor is on monthly returns, but HMRC have refused the purchaser the same cash flow benefit, claiming again that they need 12 months trading first before being allowed the same benefits! If the business model on which you thought you were buying was based on cashflow - then buyer beware when HMRC are involved!

As an aside, our very own M.D. John Crawford is to appear for one night only (well afternoon) on BBC Radio Solent (also broadcast on Surrey & Sussex) on Sunday January 10th between 3.00p.m and 4.00p.m for a VAT discussion.

Plain Sailing or Stormy Seas ahead?

2009-09-01T14:52:00.003+01:00

HMRC have just announced their new tactics against their favourite topic of yachts. The new tactics effectively try to attack those who believe they have already managed to jump through the loops and had their VAT Registration (and subsequent input VAT recovery paid) all agreed. They will attack anything they consider as abusive, such as:

(The existence of one or more of the following features might indicate an abusive structure (the list is not exhaustive - the indicators are illustrative of the points that we might take into account, together with others):

· The main user of a pleasure craft is the ultimate owner of the chartering or leasing entity.

· The main user of a pleasure craft funded the purchase of the vessel (directly or indirectly).

· The person who funded the purchase of a pleasure craft (directly or indirectly) uses the vessel for prolonged periods in the peak chartering season.

· The chartering of a pleasure craft to third parties would not, alone, be of sufficient continuity and substance to comprise an economic activity.

· The chartering or leasing entity shows significant ongoing losses in its financial statements.

· Charter fees or lease instalments due from the main user of a pleasure craft are paper transactions only (for example being offset against loans).

· Charter fees or lease instalments are below open market value.
The terms of a lease differ significantly from normal commercial practice (for example, the duration of the lease is unusually long).

If you are off the boat show in Southampton in the next couple of weeks then you may want to rethink your plans now before you find significant penalties (HMRC have to reclaim the revenue lost through Fleming claims somehow!) as well as interest an input VAT to be repaid.

Fleming Claims Update

2009-08-12T16:12:00.002+01:00

The level of the claims is estimated to range from £5 billion to £8.5 billion, but is anyone getting their money back?

Well it is always good to know that right at the front of the queue in submitting claims were the Labour Party, with a claim of £2.15m (and £2.45m interest thereon), but wait for it, this was in relation to staff expenses!! Better than that is to know that they have been one entity to submit their claim and actually have it paid so far.

I think from our experience we are seeing many of the much smaller claims finding it harder to get their money from Customs quite that quickly!

If you have submitted a claim and are either, being asked for information that is impossible to produce considering the time scales (some claims date right back to 1973), or indeed struggling for even an acknowledgment from HMRC then I am sure these experiences would be interesting to share........

Has Mandlesen been employed by HMRC?!

2009-07-03T11:24:00.008+01:00

It feels to me like there has been a recent flurry of activity in HMRC and the result is that some of the ESC's have been removed. The recent one regarding the relevant residential/relevant charitable buildings is being phased out as HMRC now readily accept that 'solely' does allow some de-minimis usage - although the amount accepted will lower by 5% after the ESC is finally withdrawn next year after the years transitional period is over. For many this is a negative outcome, but HMRC have a wonderful creative team who manage to put a positive spin on anything and on this ESC withdrawal is no exception. Their positive angle is that parties will no longer be restricted to the prescribed usage calculations in the ESC - which in my opinion doesn't quite outweigh the negative!

Anyway, will they be able to put a positive spin I ask myself on the latest registration delays? The minutes from the recent JVCC meeting provided statistics of the delays in processing those applications which require further checks and the average time for these applications rose to 70 days in March. Amongst other 'positive slants' apparently additional telephone lines have been installed at Wolverhampton in response to 'concerns from JVCC members and others'. Personally this is rather shocking to me as I have struggled to get through to the mainline for Wolverhampton for the whole of May and June and if I ever did the 4/5 lines they tried were always engaged and then they all go home at half three!

Has anyone suffered at the hands of recent registration delays? We are trying to collate a sample of cases studies which highlight the registration delays to forward to HMRC via the VAT Practitioners Group, please email me if you have had a negative recent experience........

Once you pppppop you just can't stop...

2009-06-04T15:20:00.004+01:00

Those of you who remember those rather annoying adverts will also note that once Pringles started their VAT liability argument, they just couldn't stop!

However, the Court of Appeal have finally concluded that HMRC were the right to contend that the snacks should be standard rated, despite the content of potato falling below 50% of total ingredients.

It is likely HMRC are wiping the sweat from their brows (rather like me as our office air con has broken down this week!), imagine if the ingredients % were the main decision for liability as the High Court had seemed to suggest, it could have opened up a world of manipulation in the food arena!

Anyone who stopped charged VAT based on the High Court decision will potentially have a voluntary disclosure to now be made.

Sympathetic Chairmen Do Exist

2009-05-07T17:24:00.007+01:00

As always with VAT, there is always some innocent trader somewhere who is losing out on a substantial amount of VAT through no fault particularly of their own. It is always awful to read a Tribunal that end, 'whilst I am sympathectic to the trader, there is nothing more I can do than dismiss the appeal'.

I do feel sorry at that point for both the innocent trader who has just made a costly error (without even realising it at the time they did!) but also for the Chairmen who have to deliver the heartbreaking (and costly) news.

A recent example involved a belated notification of an option to tax which was refused by HMRC, the then trader appealed. However, where no VAT is charged on the rentals in the past, there is little scope that HMRC will accept such a belated notification.

Interestingly in this case, the trader had also received advice from the Telephone Helpline, but with nothing in writing (and no full note HMRC's end) this proved little help - like I have said before - advice in writing at a minimum if you want to rely on HMRC!

Death of the Option to Tax

2009-04-29T16:26:00.005+01:00

Well, now I've grabbed your attention with a sensationalist headline, I have to admit that the option to tax is not forever gone (more is the pity I hear some of you say!), however, the title does bear some relevance to something I overheard today.

The most common query we ever receive is whether an option flows with a building or not. It's a common misunderstanding, but as my colleague put it so well today, 'the option to tax dies with each separate person's interest'. (Isn't it hard not to earwig into other people's conversations in an open plan office!)

Dramatic description, but certainly gets the point across!

Where has Winne the Pooh's Honey gone?

2009-04-17T11:43:00.003+01:00

A recent Tribunal case made us laugh in the office (yes, even VAT and Customs Duties can be amusing at times!).

The case concerned a jar of honey, posted from Australia to the UK Appellant as a gift, the weight of the jar of honey was 1.8kg.

Unfortunately for the Appellant, the legal import or honey is only 1KG - therefore what did Customs do - seized it!

The Appellant therefore appeals, wanting his jar of honey for his toast no doubt and in no doubt that he was not going to let the Customs Officer have honey on his toast instead.... The Chairman, whilst acknowledging that Customs acted within the law, stated:

"I also confess to having found it somewhat bewildering that a case, that generated a weight of paper very significantly in excess of the weight of honey, was occasioned simply by the personal importation of one quantity of honey being unproblematic, whilst importation of the same honey involved the destruction of the honey"!!

Winnie the Pooh will now make sure his Uncle sends his honey in 1KG jars in a number of unconnected gifts - good to know our taxes pay for such relevant and productive cases!

ITV - Taking on the Taxman

2009-04-08T12:22:00.002+01:00

Did anyone watch the programme on Monday night? In the main those sensationalist ITV programmes are switched off in my house - but this had to be an exception!

It was good to finally see the problems our clients face being given the airtime they deserve. Of course, as HMRC said, these are only the odd mistakes of theirs and not the norm - but I am sure we all know someone who has suffered at the hands of the these small odd mistakes!

What really intrigued me is, apparently HMRC receive letters of thanks for their efforts and help - go on then, hands up those who had the time to write to them, let alone didn't get 3 different answers every time they called the National VAT 'Helpline'??!!

Staff Hire concession goes on 1st April

2009-03-24T13:14:00.005Z

HMRC have produced a Business Brief and Information Sheet setting out the VAT changes to the provision of staff which will take effect on 1st April.

Details can be found on HMRC's website:

http://www.hmrc.gov.uk/briefs/vat/brief0809.htm

We will be pleased to advise any businesses who will be affected by the changes and suggest possible alterations.

Delays in VAT Registrations

2009-03-24T13:00:00.003Z

We understand there is a 21 week maximum turnaround for VAT registrations. This unofficial policy means businesses are having to wait up to 5 months before being registered for VAT.

What's your experience?

VAT cuts creeping back up again

2009-03-12T12:11:00.003Z

With reference to the above blog on the BBC Watchdog website, how much time did you spend changing prices. We know of one major retailer with 250,000 lines who changed everyone!

We know of retailers who have inadvertantly reduced lines which are zero-rated!

Confusion and costs abound. How were you affected by the cut in VAT and will you change back to 17.5% in December?

A taxing ordeal

2009-03-12T12:03:00.005Z

Referring to the above letter in the Daily Telegraph on the 11th March. We would like to know whether you have had a recent taxing ordeal with HMRC. Did you think the inspectors were reasonable?

Give us your feedback please

Is fighting HMRC just simply too costly?

2009-02-05T10:14:00.004Z

HMRC have finally concluded that after 13 years of litigation over the Marks and Spencer teacakes case, that enough is enough!

I recently managed to persuade HMRC complaints team, after a two year battle, to back down and pay up. It has been a relentless battle, made difficult that knowing the more HMRC dig their heels in, the more the client’s costs merely escalate without a result. The persistence did pay off eventually and I did manage to get the clients costs reimbursed, but as with all these cases, there is never a guarantee on such a positive outcome.

It did get me thinking that, if 2 years arguing one relatively small issue (although financially large for the client concerned) seemed a long time, and HMRC will clearly argue for longer( even up to 13 years!), has anyone else found themselves ‘giving-up’ as arguing is costly and time consuming – is anyone as cynical as I am that they believe some Officers use ‘dragging’ it out as a technique to hope you will back down first due to costs?

Don't ignore the savings under the Flat Rate Scheme

2009-01-15T13:20:00.001Z

To start the New Year off I wanted to talk to everyone about the use of the Flat Rate Scheme, especially to those smaller businesses out there. My own personal reason for starting my year of 'VAT tips' off with this one is, despite my various attempts at advising my father of his need to stop feeding the pockets of HMRC and indeed implementing the flat rate scheme to save money, he has still to take stock and listen. I have decided that if my own family wish to ignore the wealth of free advice they gain from my position (I do hope the MD isn't reading this!), then there will certainly be other businesses out there that are willing to pick up on these free tips!

The Flat Rate Scheme is still one of my favourite schemes for the smaller businesses yet it still is not used enough. For those of you frightened of 'schemes' it really is one scheme which makes life much simpler. The basic idea is that you charge VAT in full on all your income, issuing invoices as normal (this will include exempt income too), but you only pay a set % over to HMRC (depending on your main line of business), thus simply pocketing the difference. The 1% first year discount is still available for those who are newly VAT registered thus making the scheme rather attractive for most small businesses. I would especially urge those who work from home and thus incur minimal input VAT to make sure they are on this scheme. I say this, as the other side to the scheme is that you are unable to recover any input VAT (apart from on certain capital items), but to this apparent downside, you pay a lot less to HMRC in the first instance and thus both your payments to HMRC and paperwork should decrease significantly! Now that is a scheme worth looking at........