VAT do's and don'ts
Pact Accountancy can advise businesses in the UK to take some essential steps and avoid losses when it comes to VAT. This article examines some critical VAT do’s and don’ts.
- Do keep a monthly record of your turnover – late registration can lead to severe penalties.
- Do inform your local VAT office if significant changes must be reported within thirty days.
- To maintain records for the past six years – these may require by law.
- Do charge VAT on supplies to your employees.
- Do levy VAT on any equipment or vehicles (except motor cars) you sell or part-exchange with
- Do Account for VAT on fuel used for private motoring using flat rate valuation.
- Do not claim the VAT paid on motor car purchases – it is non-refundable except in certain exceptional cases.
- Do not claim the VAT paid on goods or services used for personal purposes. A reasonable percentage claimed where the element of personal use locate (e.g. telephone). There are special arrangements for the private use of petrol (see above)
- Do not claim the VAT paid on entertainment (excluding reasonable, related costs for entertainment to foreign customers)
- Do not Inter-Company responsible for VAT on fees.
- Do not charge VAT on the business transaction of concern (make sure the contract has appropriate VAT terms)