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VAT DEFINITION OF “MOTOR CAR”

VAT

For VAT purposes the definition of a motor car has been amended several times over the years. The current definition states:   “Motor car” means any motor vehicle of a kind normally used on public roads which has three or more wheels and either: a)    is constructed or adapted solely or mainly for the carriage of […]

MTD FOR VAT TO BE EXTENDED TO ALL VAT REGISTERED BUSINESSES IN 2022

Tax, VAT

Since 2019, the vast majority of VAT-registered businesses with a taxable turnover above the VAT threshold (£85,000) have been mandated to keep digital VAT records and send returns using Making Tax Digital (MTD)-compatible software. From April 2022 these requirements will apply to all VAT-registered businesses. It has also been announced that MTD for Income Tax […]

INTERACTION WITH VAT FLAT RATE SCHEME

HMRC, VAT

Small businesses with turnover below £150,000 may join the VAT flat rate scheme which makes their VAT accounting much simpler as they merely pay HMRC a percentage of their VAT inclusive turnover. The temporary reduction in the rate of VAT from 20% to 5% reduces the flat rate percentages for affected businesses as set out […]

VAT TREATMENT OF DEPOSITS

HMRC, VAT

It is fairly common, particularly in the summer holidays, to pay a deposit when booking a hotel or self-catering accommodation but how should the deposit be accounted for? HMRC have confirmed that the hotel has the option of charging VAT according to the ‘basic tax point’ (dates of the stay) rather than the ‘actual tax […]

BUILDERS’ VAT RULES DELAYED FOR A YEAR

VAT

The government have decided to delay the start of the proposed VAT reverse charge for supplies by sub-contractors in the construction sector. The reason for the u-turn is the lack of awareness of the change that was originally due to start on 1 October 2019. Many sub-contractors, and some main contractors, were not prepared for […]

COMPANY OFFICERS JOINTLY AND SEVERALLY LIABLE FOR VAT PENALTY

HMRC, Tax, VAT

The decision in a recent tax tribunal case reminds us that directors and other company officers may be personally liable for VAT penalties of their company. The recent case involved a penalty for late registration for VAT where the threshold had been exceeded. Three conditions must be satisfied before the liability for a penalty payable […]