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.
Tuesday, June 8, 2010
The VAT News June 2010
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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Friday, May 14, 2010
The VAT News May 2010
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
Read it here
Thursday, May 13, 2010
Stakes rise on VAT rate rise
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.....
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.....
Thursday, April 1, 2010
It's No April Fool!
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....
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....
Friday, March 5, 2010
Flat Rate Flattens Profits
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.
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.
Friday, February 5, 2010
HMRC v All Football Clubs
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........ ?
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........ ?
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