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  • VAT Memo - Input tax - Deductible input tax - Making a claim - Timing - 2014
    A claim for input tax cannot be made until the evidence (¶1972+) which is required to substantiate that claim is held. In any event, an input tax claim must be made within 4 years of the first VAT period when that evidence was held. The method of the claim may be by return, or by voluntary disclosure (¶3020). There are particular rules where a late claim is made by a partly exempt trader (¶2254+). If a supplier has used the wrong VAT rate, or been subject to compulsory backdated registration, a customer...
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  • VAT Memo - Compliance - Records - VAT invoices - Supplier prepares the invoice - Adjustments - Errors - 2894
    The supplier must never destroy a VAT invoice and issue another one with the same number, as this leaves the VAT record incomplete. Instead, there are three ways of making a correction.Comment It is obviously important that both the supplier and customer are aware of how the correction is to be managed, and that reciprocal adjustments are made in their respective VAT accounts.
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  • VAT Memo - Compliance - Reporting - Returns - Correcting errors - What is an error? - 3014
    Some adjustments result from the intricate VAT rules rather than errors. However, common errors include: - claiming input tax which is ineligible (such as on business entertaining); - charging the wrong VAT on sales (either by applying the wrong VAT rate, or making an arithmetical error); - omitted sales; and - transposition errors. Examples of such adjustments which are not errors include: - credit and debit notes (¶2925+); - late invoices received from suppliers (¶2012+); - adjustments for wrong entries...
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  • VAT Memo - Compliance - Payment - Repayments - 3230
    Repayments may arise due to: - the net VAT position shown on the return (¶3238+); - an increase in a VAT repayment already due (¶3238+); - a refund request after VAT has been paid in error (¶3244+); or - a claim for relief under any of a range of provisions (¶3258). Repayment supplement (¶3264+) will also be due to the trader in certain circumstances (although only until 31 March 2020) and statutory interest (¶3270+) is payable in cases of official error.
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  • VAT Memo - Compliance - Payment - Repayments - Refunds made in error - Collection of VAT - 3286
    The assessments in ¶3282 and ¶3284 cover both VAT and statutory interest (¶3270+) where relevant. HMRC may also decide to levy default interest (¶3880+), where this represents commercial restitution and the trader has failed to pay the assessment within 30 days. Interest runs from the date on which the assessment was notified to the trader through to the date of payment. 1. It is possible for both types of assessment to be raised at the same time, depending on the complexity of the errors (or where a payment...
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  • VAT Memo - Enforcement - Powers - Assessment of under-declared VAT - Officer assessments - General principles - Misdirection - 3687
    HMRC has stated (tiny.cc/vm3687) that where it provides information or advice which is incorrect in law it will consider itself bound by such advice, provided that it is clear, unequivocal and explicit, and the trader can demonstrate that: - it reasonably relied on the advice where appropriate; - it made full disclosure of all the relevant facts; and - strict application of the statute would result in financial detriment to the trader. The First-tier Tribunal does not have the jurisdiction to rule on the application...
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  • VAT Memo - Particular activities - Retailers - General topics - Unjust enrichment - 6314
    Where HMRC proves that a trader will be better off than they would otherwise have been, because overpaid VAT should properly be reimbursed to the trader's customers (but that is not the trader's intention), a VAT repayment will be denied, or only made with stringent conditions attached (¶3254+). When a retailer has been treating a zero-rated item as standard-rated, there is scope to recover the overpaid output tax over the last 4 years and keep the money within the business rather than refund it all to each...
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  • VAT Memo - Cross-border transactions - Goods within the EU - Special reporting - Intrastat declarations - Submission - 9356
    SDs are normally submitted on a calendar month basis. By concession, a business which has been approved to use special VAT periods (¶2990), such as 4-weekly periods, may use these when submitting SDs, but SDs must still be submitted each month. For example, if a business has 13 4-weekly VAT periods, its Intrastat periods must include one 8-week period. SDs must be submitted electronically, no later than 21 days after the end of the reference period. - Where a business uses special VAT periods, it must notify...
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