Any new business setting up in the UK is likely to be in a VAT repayment position in its start-up phase. This is because prior to commencing to supply goods and services it will not have any output tax but will incur input tax on most of its start-up costs (i.e. purchase of equipment, furniture, premises, raw materials etc). It is important, therefore, to recover this VAT from HMRC as soon as possible, in order to minimise funding costs.
VAT Solutions can assist with timely submission of VAT returns and speedy processing of VAT repayment claims. With previous experience of working within HMRC, we have an understanding of how its systems operate and the queries that are likely to be raised and can manage the repayment process to ensure delays are avoided.
We can also advise regarding your own accounting and invoicing procedures in order to take maximum advantage of VAT regulations. We are able to provide specialist advice on a wide range of services, tailored to your business circumstances, for example:
Businesses that provide services that are primarily exempt are likely to fall within the partial exemption rule, which means the business will have to use an approved partial exemption method in order to determine how much input tax may be recovered on associated supplies. In carefully reviewing both the inputs and outputs of the business, VAT Solutions can agree and implement the most suitable partial exemption method to maximise VAT recovery.
If a customer doesn’t pay you for goods or services on which you have charged VAT, and you have paid that VAT to HMRC, VAT Solutions can help you to get the VAT back.
VAT Solutions can prepare a claim and liaise with HMRC in order to recover the VAT charged to your business.
Customs duty is a tax charged on importation of goods produced outside the European Union (EU). VAT Solutions can help you in determining whether you should be paying customs duty and if so, the value that should be paid using the correct duty rate for the product. Our resource allows us to advise on use of reliefs and deferment opportunities along with streamlining import processes.
VAT reliefs are available for various businesses, individuals and charities. VAT Solutions can identify where and when you may be entitled to VAT relief in order to help you adopt good VAT practice and reduce your VAT burden.
Import VAT is levied on goods imported from non-EU countries. HMRC outlines strict guidelines in connection with the certificates and evidence required in order to recover the VAT. VAT Solutions can assist by advising you on your import VAT recovery, as well as identifying the type of goods where import VAT is not due in the first place, thereby increasing the cashflow of your business.
HMRC has been convinced in special circumstances to allow simplified methods of VAT recovery, for example, on employee expenses and company credit cards. We have assisted a number of businesses in these discussions.
All pension funds suffer VAT on costs particularly if they invest in property. There may be scope to make use of VAT registrations to recover some of the VAT incurred.
Ensuring good internal controls are in place to manage the payment of VAT is essential to avoid any difficulties with HMRC. This includes payments under any special schemes or payments on account.
Sometimes it is possible to challenge assessments issued by HMRC and have them either reduced or withdrawn. We will help a business decide on the correct course of action and assist in reducing the VAT liability; we will also review assessments and assist in any negotiations entered into with HMRC.
Businesses may incur penalties for a number of different reasons, including penalties for late registration, errors or for alleged dishonesty. How you cooperate with HMRC can reduce the size of the penalty, and in some cases reduce the penalty to nil. VAT Solutions can help advise you in relation to any type of VAT penalty you may have incurred. In addition, we can help you with your VAT accounting to help you avoid further penalties in the future.
Whilst exports are zero rated, we are finding that HMRC is beginning to scrutinise export evidence and raise questions, and even assessments, where their requirements are not met. We have assisted a number of businesses in defending this action.
In addition to penalties, businesses can also be charged interest on misdeclarations of VAT. VAT Solutions can help, much in the same way as with penalties, in resolving interest disputes and in verifying that the amount charged by HMRC is accurate.
We will assist by reviewing any assessments raised by HMRC. We will review the grounds for the assessment and give our initial opinion on the validity of the assessment absolutely free. Part of this service is to advise on the options available and the details of the follow up procedures.
If an assessment review and local reconsideration by HMRC is not successful the next option is to appeal to an independent VAT Tribunal.
We provide advice and support on the best course of action and how to lodge an appeal. If required, we will also lodge the appeal on behalf of any business, instruct counsel and assist at the hearing.
A VAT Health Check is an in-depth periodic review of a business’s activities and systems to ensure that VAT is being dealt with accurately and at the correct time. Examples of the areas covered as part of a Health Check are detailed below:
This list is by no means exhaustive and will be tailored to a business’s particular requirements. In addition to overall compliance, the Health Check may help to identify areas where VAT recovery can be maximised and provide potential cost saving ideas.
We have found this service can be particularly helpful prior to a scheduled visit from HMRC.
If, in the unfortunate situation that you find yourself in a dispute with HMRC, VAT Solutions can liaise with the relevant VAT office on your behalf to review the case – this is called a local reconsideration. We will ensure that all the facts are fully taken into account and we will aim to resolve disputes by exploring all reasonable possibilities of settlement locally with HMRC.
We provide training in any format to suit your particular needs and requirements. The type of services provided include the following:
In House Training
We will undertake training for all staff that deal with VAT, from those who process VAT, to those personnel who are responsible for the control and management of the tax. The training can be carried out at your premises and will be designed for the particular needs of your business.
We undertake training on the general system of VAT and VAT legislation. This includes topics such as VAT compliance, management of tax and VAT optimisation.
These can be run individually or in conjunction with other businesses and will typically cover proposed changes in VAT legislation, changes in HMRC’s policy and opportunities to save VAT.
VAT Training Manual
This will be tailored to your precise business requirements and industry sector for circulation to relevant personnel.
A combination of these methods can also be facilitated.
VAT is becoming an ever more complex tax and the onus is placed on you to declare the right tax at the right time. Interest and penalties can often arise as a result of failing to comply with this requirement. VAT Solutions is able to give you the peace of mind you require when assimilating your return, by providing technical assistance with those more difficult and/or one-off transactions that you may be uncertain about.
Landfill tax, Aggregate levy and Climate Change levy are less commonly applicable taxes but from time to time businesses unwittingly become drawn into projects which require consideration of these taxes. VAT Solutions can help identify and advise on the impact.
We have experience in negotiating with HMRC on difficult payment situations and are able to assist in producing and presenting financial information in the best possible manner in order to help secure a realistic and acceptable payment plan with HMRC.
All registered persons making taxable supplies will be required to account for output tax on those supplies at the appropriate VAT rate. It is important for both you and your customers that the correct VAT treatment is applied. Similarly, you need to ensure that you are not being charged VAT incorrectly, especially in the case of exempt/partly exempt and non-VAT registered businesses where this represents an absolute cost. VAT Solutions can help businesses clarify the correct VAT treatment for their products and services. We can assist in negotiating or seeking new rulings from HMRC on products and services.
As case law develops and new products and services evolve, VAT treatment can be altered sometimes to the advantage of the taxpayer. Food products are a good example of this and achieving zero rating can impact significantly on marketing and profitability. We have experience of assisting clients in this area.
Retailers and those with point of sale coded product files should review these frequently to ensure the VAT treatment is correct and that they are not under or over stating their VAT liability though incorrect VAT coding.
VAT Solutions can help your business plan to manage future changes. We can identify changes in legislation that will have a direct effect on your business and plan to avoid risk, whilst also considering opportunities that may be available. VAT Solutions recognises that professional and correctly implemented VAT planning can result in significant VAT savings or at the very least, deferral of any VAT cost.
Retailers are active in a wide range of markets and for many it can be difficult, time-consuming and costly to record the VAT on every single sale. As a solution, there are several VAT accounting schemes that retailers can use instead of accounting for VAT in the standard way. VAT Solutions can help retailers by identifying the different types of retail schemes available and the most appropriate and easiest for your business. By not having to record VAT separately in your accounts for each and every retail sale you make, VAT Solutions will identify the best VAT accounting method to help save you time and money.
Most services in connection with finance are VAT exempt. Whilst not having to charge VAT on their services, exempt businesses will have a restriction on the recovery of input tax; it is, therefore, important for them to understand the VAT treatment of the services they are providing. Intermediary services and outsourced financial services are often viewed as standard rated.
VAT Solutions can help your business in understanding the financial products and services you offer from a VAT perspective, ensuring the correct VAT treatment is implemented.
Whenever you supply services, then for VAT purposes, it is essential to know the place of supply. This determines which country’s VAT rules should be used and how you have to account for the VAT on the sale. If you are supplying services abroad, then the place of supply is not always obvious. At VAT Solutions we can help businesses by determining where the place of supply is taking place, whether or not you need to implement the reverse charge mechanism and if your supplies are being made to taxable or non-taxable persons.
There are special VAT treatments for charities consisting of relief from VAT on expenditure and income. VAT is a real cost to charities who work to very strict funding. We have assisted many charities in managing their VAT cost and making VAT claims.
VAT on the acquisition of an interest in land and property can be very substantial.
VAT Solutions can assist in mitigating the VAT amount payable. This is of particular interest to companies engaged in exempt/partially exempt activities, i.e. financial services and insurance.
The acquisition of another company by means of acquiring the share capital of that entity can result in irrecoverable VAT costs. This is because HMRC takes the view that as the transfer of shares is exempt from VAT, any VAT costs incurred in connection with the transfers are not deductible. The VAT applicable in respect of professional fees can represent a significant VAT cost.
With proper VAT planning and consideration of the role of the professional advisers and the precise nature of the services they provide, it may be possible to argue that some of the services are exempt from VAT, or alternatively are deductible on the grounds that they do not relate to the purchase of shares.
Consideration can also be given to acquiring the business through another mechanism i.e. purchase of the underlying assets if this proves more VAT efficient, subject, of course, to other commercial and legal considerations.
The VAT treatment of services is determined by the nature of the service that is supplied. The nature of the service is predominantly determined by the contractual arrangements between the parties. It is vitally important, therefore, that contracts accurately reflect what is being supplied and that VAT implications of contracts are considered at the drafting stage.
VAT Solutions can assist with the drafting of contracts to ensure that the contracts are “VAT friendly” in that they achieve the intended VAT treatment and do not result in any unpleasant surprises.
VAT incurred on professional costs related to corporate restructuring has been an area of dispute with HMRC for many years. Generally, HMRC views any VAT on such costs, which relate to share issues, as being non-recoverable. VAT Solutions is able to advise on any dispute you may have with HMRC on this subject and help you prepare a case to convince HMRC to allow VAT recovery.
On a sale or transfer of business assets, the transaction can be treated as a transfer of a going concern (TOGC), provided that certain conditions are satisfied. If the conditions are not met the transaction will be subject to VAT in the usual manner. The main implication of a TOGC is that the transaction is treated as being outside the scope of VAT, meaning no VAT is chargeable.
At VAT Solutions we can assist businesses by identifying certain costs associated with a TOGC that may be recoverable and identify the special requirements necessary for a TOGC. Furthermore, we will also assist businesses in the VAT registration or transfer of a VAT number between the seller and buyer, if required.
A taxable person is someone who is actually registered or is required to be registered for VAT. However, before a person registers for VAT they must make, or intend to make, taxable supplies. For VAT purposes, persons include individuals, partnerships, bodies corporate, unincorporated clubs and associations.
VAT Solutions can help persons identify where they may be liable to register, for example, exceeding the registration threshold and associated requirements. We also offer advice on how to avoid penalties, by ensuring that the registration rules are properly observed and applied.
The property sector has to deal with many VAT issues, which depend on the exact nature of the supply being made. The basic position is that property transactions are exempt from VAT; however, there are many exceptions which are treated differently for VAT purposes and the Option to Tax rules are now very complex.
The sum of money involved in property transactions is generally significant and failure to appreciate the VAT implications can be costly. VAT Solutions can work with you to help you understand your VAT position and its treatment. We can deal with many issues within this complex area of VAT, including the Option to Tax, new builds, construction work, residential and charitable properties, to name but a few.
When a business becomes insolvent or goes into administration, a responsibility to deal with VAT continues. Negotiation and reporting to HMRC becomes more complex and some flexibility exists in the VAT accountancy process. We can assist in discussion and negotiation with HMRC in this area for the business and for professional advisors.
We work with a wide network of professional advisors, from accountants, tax advisors and lawyers to architects, surveyors and various specialist consultants. We provide VAT advice on a range of topics related to their specialist areas and where possible we are able to cross refer services.
It is possible to arrange for a group of companies to be regarded as a single entity for VAT purposes. The benefit of group registration is that supplies of goods and services between group members are (subject to specified exceptions) ignored for VAT purposes. Grouping is of particular benefit where one or more group members is exempt/partially exempt from VAT. In these circumstances, grouping avoids a potential VAT cost on supplies between connected companies.
For more information and a bespoke personal service, our team of dedicated and knowledgeable staff would be delighted to assist with any enquiries.Contact Us