VAT Do's and Don'ts
VAT Partner Alison Birch has compiled a handy list of Do’s and Don’ts when it comes to managing your VAT.
DO keep a monthly record of your turnover - late registration can result in severe penalties
DO notify HMRC when major changes take place - changes must be notified within thirty days
DO retain records for the last six years (ten years for properties and VAT MOSS) - these could be demanded by law
DO obtain and keep VAT invoices - you must make sure these are valid VAT invoices as these are your evidence to claim back VAT on supplies made to you
DO charge VAT on supplies to your staff
DO make sure you are ready for Making Tax Digital for VAT - there will be penalties for non-compliance
DO charge VAT on any equipment or vehicles (except motor cars) that you sell or part-exchange
DO account for VAT on fuel used for private motoring using the appropriate fuel scale charge.
DON’T claim the VAT paid on the purchase of a motor car - it is not recoverable except in some very special cases
DON’T claim the VAT paid on entertaining clients (except for reasonable, relevant costs of entertaining overseas customers)
DON’T forget to account for VAT on inter-company charges - unless between members of a VAT group
DON’T charge VAT on the transfer of a business as a going concern (make sure contracts incorporate appropriate VAT provisions)
DON’T forget to speak to your VAT adviser before making any significant transactions - especially with regard to property.
Please contact Alison Birch for further information:
Written September 2018.