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  • Documents - Schedule of pre-registration expenditure
    Schedule of pre-registration expenditureIf you trade before you register for VAT, you could claim input tax going back up to four years.Pre-trading expenditureIt is possible for you to reclaim some of the VAT you incur before you register on the first VAT return (when you eventually do). VAT can be reclaimed on pre-registration purchases of both goods and services, but there are restrictions. VAT can be reclaimed:on goods if the purchase was incurred during the four years prior to registrationon services if...
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  • Documents - Agricultural flat rate scheme letter
    Agricultural flat rate scheme letterIf you operate a small farming business, you might qualify for a little known scheme that can give your cash flow a boost.When is the scheme available?The agricultural flat rate scheme (AFRS) is available to a wide range of "farming" businesses. Farming for the purposes of the scheme is very widely drawn and includes any business involved in:Crop production. General agriculture, including viticulture, growing of fruit and of vegetables, flowers and ornamental plants, whether...
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  • Documents - Letter withdrawing from flat rate scheme
    Letter withdrawing from flat rate schemeIf you use the flat rate scheme (FRS), you can leave it voluntarily at any time by writing a simple letter to HMRC.FRSIf you operate the FRS, you are free to leave it and change to standard VAT reporting at any time. You might do this if your input tax has increased, meaning the FRS leaves you worse off, or you signed up to the scheme to enjoy VAT savings but the limited cost trader category introduced in 2017 has curtailed them. LeavingTo leave the scheme you simply need...
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  • Documents - VAT voluntary disclosure of error letter
    VAT voluntary disclosure of error letterIf you discover an error on a VAT return, you will need to correct it. In most cases this can be done simply by amending your next return, but where the error results in an increase in your VAT liability you should always send a letter of voluntary disclosure as this will protect you from penalties. If you find an error of £10,000 or lessIf you discover that you've made a mistake and misdeclared the amount of VAT due, you need to adjust it. If the errors on the return...
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  • Documents - VAT surcharge reasonable excuse letter
    Reasonable excuse letterHMRC has a wide range of penalties available to it. Many of these can be reduced while others can be removed completely where you have a reasonable excuse for the action which gave rise to the penalty. Having a reasonable excuseMost of the penalties imposed by HMRC will be cancelled in full if the taxpayer can establish a "reasonable excuse" defence. Unhelpfully though, there is no definition of "reasonable excuse". This argument now applies to: failure to notify liability; and default...
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  • Documents - Transferring VAT number cover letter
    Transferring VAT number cover letterIf you acquire the trade and assets of a business as a transfer of a going concern (TOGC), you can apply to keep a pre-existing VAT registration number.TOGCWhen you buy a business as a TOGC you have the option of taking over the existing VAT number as well. You do this by completing a Form VAT68 and submitting it to HMRC, along with the VAT1 application for VAT registration. The previous owner must not submit a VAT7 application for deregistration. Once the transfer of the...
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  • Documents - VAT return checklist
    VAT return checklistMaking a mistake on your VAT return will result in under or overpaying VAT. This might mean losing out on VAT you can reclaim or underpaying which can result in financial penalties. Our VAT return checklist can help you reduce errors.What to put on your VAT returnThe principle of VAT is that a business adds its output tax to its sales. If it sells to another VAT-registered business, that business may claim relief for tax it has paid on its purchases and expenses (its input tax) against its...
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  • Documents - VAT - request for a written ruling
    VAT - request for a written rulingIf you have a VAT problem and can't find the answer in any of HMRC's published guidance, you can ask it for a written ruling. However, HMRC is often reluctant to provide one and it usually directs you to its guidance. To ensure you obtain the written advice you need, make your request in a format which forces HMRC to respond properly.hmrc guidance and Written rulings It's not easy to get a written ruling from HMRC on VAT matters. Its published guidance states: "You can write...
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  • Documents - Request for HMRC VAT internal review letter
    Request for HMRC VAT internal review letterHMRC operates a VAT internal review system to resolve disputes without the time or expenses involved with a formal appeal. If you wish to use this facility you should apply in writing to HMRC within 30 days of the assessment or decision with which you disagree. Asking for a reviewIf you disagree with HMRC over an assessment, you can ask for an internal review of the decision or you can appeal to the First-tier Tribunal (FTT). HMRC advises that in the first instance...
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  • Documents - Flat rate scheme cover letter
    Flat rate scheme cover letterIf your business is VAT registered, you could be eligible to use the flat rate scheme (FRS) to simplify your accounting. Use our letter to accompany your claim.VAT reportingThe amount of VAT your business normally must account for to HMRC is the difference between the VAT it charges on its taxable supplies and the VAT it incurs on its purchases.This means that detailed records of both supplies and purchases you make must be kept. In particular, in order to recover VAT on purchases...
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1 to 10 of 19 articles