Double VAT?

#42
If your making money you can make a touch more on the side by wheeling & dealing

Our books describe a knacked old vito disposed of for a nominal amount, I'm certain
we didn't a sell a pimped out camper/ surf van with a pop up roof & trouser the cash ?
 
#43
It was mainly because my Digger was to load it.
Right; I'm certainly not expert on the full ins and outs, so I'm presuming that the digger was providing a cost not the hard core on the basis that perhaps it's using rebated fuel. I know that VAT officers had leeway from their annecdotal evidence and about 10 mins work worth of fuel and depreciation on the digger would have been negligable. If it's not a regular arrangement that is.
 
#44
He can charge the total of the invoice if he wants but is then making a profit , he will then have to pay the VAT he charges to HMRC , nothing wrong with it if you unless you think tradesmen making money is wrong.
Not my point at all. The trader is not reclaiming the VAT on the original purchase, which he could if he is VAT registered, but his idleness is costing the customer extra. The taxman won't mind that the VAT was paid twice, even though both sets are ultimately coming out of the customer's pocket, who, by definition, is now paying well above the odds.

Or the trader is claiming the original VAT on his reconciliation, but is hoping the customer doesn't understand the system and is sticking the extra in his skyrocket. (We all know that never happens)
 
#45
This is why I deregistered. I'm not collecting tax for the revenue and paying my accountant for the privilege.
I don't have threshold problems I split my invoicing through different businesses one of which is a sole trader.
I thought about deregistering, but then realised I'd have to pay all the VAT owing on the company car. I didn't have that sort of cash lying around so until I do, I'm stuck in the VAT cycle
 

FORMER_FYRDMAN

LE
Book Reviewer
#46
I'm no accountant thus I operate my business on the basis that trying to be cute with VAT, and HMRC generally, is for losers.

On the face of it, I would guess that the answer is along the lines of:

1. Your supplier can charge you whatever he likes if you agree and he's a bit of a moron for giving you a breakdown, though he might feel that vague waffle about VAT is the easiest way to increase his prices by 20%.
2. Since the VAT reclaimable, you are entitled to raise your eyebrows at what is, effectively, contract padding but, so long as he's rendering unto Caesar, I don't think he's doing anything wrong, though he is playing you for a mug (his counter might be that it's a cost he's got to carry for up to three months).
 

overopensights

ADC
Book Reviewer
#47
Right; I'm certainly not expert on the full ins and outs, so I'm presuming that the digger was providing a cost not the hard core on the basis that perhaps it's using rebated fuel. I know that VAT officers had leeway from their annecdotal evidence and about 10 mins work worth of fuel and depreciation on the digger would have been negligable. If it's not a regular arrangement that is.
I agree completely with what you say. During a previous chat, I had told a Vat officer that not all that came into my business as stock was paid for. For example during a demolition of an ancient derelict in the late 1980s, I acquired a lovely medieval oak door with a carved moulded door frame, it came in for nothing. It was not rated by the owner, he told me to take it off site, as he was about burn it. Being vat registered of course I was obliged to invoice the eventual sale with the vat added even though it was a freebee. It was of course sold through the business, if I had not, it would have been fraud. I sold it to the Royal Shakespeare company.

I don't mind vat, I find it quite easy to understand and to administer. It is a much fairer tax than other methods.
The fact that traders have to reach a certain threshold causes some traders to reduce workloads, some builders have their customers pay for the materials in order to reduce obvious financial activity in a business, I see a lot of that. Such activity leads to an 'uneven playing field.' While in France and Germany all businesses are registered for vat from day one of commencement no matter what turnover, I am not sure if this is still the case?. That makes sense to me because you live 20% cheaper for tools goods, vehicles and road fuel etc.

A Tax officer once told me that the UK Government are aware that about 22% of our economy is 'Black money' I don't know how true that is.
 
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#48
A Tax officer once told me that the UK Government are aware that about 22% of our economy is 'Black money' I don't know how true that is.
It's an open secret. Back in the early nineties we were informed that an estimated 10% of the city of London was Laundered money. How true that is can be seen by the number of Banks accused of Money Laundering starting at least with the BCCI scandal. The fines on these companies is eyewatering and yet we worry about the fact that the Public could be laundering. We probably are unwittingly if every 20 P in the £1 in your pocket has dodgy provenance. But it means that the entire financial set up across the world is contaminated and the Governments have curtailed the means to root it out. The simple answer is don't get caught. I can still rememebr when a couple of VAT men got a gong for rooting out a fraud netting £100K. Me an an oppo once dealt with 1.25 million dollars and found out how perverse the system could be.
 
#49
I don't mind vat, I find it quite easy to understand and to administer. It is a much fairer tax than other methods.
The fact that traders have to reach a certain threshold causes some traders to reduce workloads, some builders have their customers pay for the materials in order to reduce obvious financial activity in a business, I see a lot of that. Such activity leads to an 'uneven playing field.' While in France and Germany all businesses are registered for vat from day one of commencement no matter what turnover, I am not sure if this is still the case?. That makes sense to me because you live 20% cheaper for tools goods, vehicles and road fuel etc.
And that would get most taxpayers goats because it's subsidising business with Governmental aid-strictly verboten under EU law.
 

ugly

LE
Moderator
#50
You don't live 20% free, its a myth, you get to offset it every three months which is no good if you need that 20% now. The fixed rate contractor scheme was a scam designed to get folk to sign up. I'm glad I am off that merry go round, collecting tax for the govt for absolutely no real benefit for myself.
 
#51
You don't live 20% free, its a myth, you get to offset it every three months which is no good if you need that 20% now. The fixed rate contractor scheme was a scam designed to get folk to sign up. I'm glad I am off that merry go round, collecting tax for the govt for absolutely no real benefit for myself.
But it is PAYE that's killed the economy IMHO. It was OK in it's time when salaries were £25 per week but we're reaching a point when the allowances are now ten times that. The average wage is not the norm, it's been driven up by ridiculous salaries of a few massive companies when the usual is about 19K a year. That's £7,000 that's taxable. I can remember when I was working back in the late eighties/90's when my tax matched my Mortgage and I wasn't well paid. Mid seventies, we refused to work overtime because it simply didn't pay- we were worse off. And most SE were expected to run two books. If you had looked at the books of some companies/SE they would hardly rub two pence together as it was all cash and off record.
 

ugly

LE
Moderator
#52
Its definetly hardly worth being self employed now. Years ago 16 years ago in fact I was very much in demand. I could name my price (day rate sole trader) and get a agency to do my factoring and they would add vat and slap a fee on top. The client just paid up. The important thing was delivering the job.
Nowadays you are screwed, lose 33% as paye or lose 20% minimum through an umbrella company or take the rate they offer and do a Ltd Company and all of the hassle that goes with it!
At least with a Ltd you can turn them over every six or so months.
 
#53
Its definetly hardly worth being self employed now. Years ago 16 years ago in fact I was very much in demand. I could name my price (day rate sole trader) and get a agency to do my factoring and they would add vat and slap a fee on top. The client just paid up. The important thing was delivering the job.
Nowadays you are screwed, lose 33% as paye or lose 20% minimum through an umbrella company or take the rate they offer and do a Ltd Company and all of the hassle that goes with it!
At least with a Ltd you can turn them over every six or so months.
............which seems like the tax system is totally screwed, but lets face it the current system is verging on 200 years old.....
 

ugly

LE
Moderator
#54
............which seems like the tax system is totally screwed, but lets face it the current system is verging on 200 years old.....
Seeing how income tax was started to fund wars with the French its time i had either a rebate or a war with France (Missquote courtesy of the Pub Landlord pbuh)
 
#55
A Tax officer once told me that the UK Government are aware that about 22% of our economy is 'Black money' I don't know how true that is.
Probably higher than that.

The government even add £65billion to the GDP figures to cover the drug industry and prostitution.

As an aside and to show that VAT Inspectors are not humourless dullards. When I was a student I used to work part-time for an electrical wholesaler (doing the invoices/accounts on Saturday morning etc). The owner asked me if I could pop in at the end of a weekday as he was having his VAT audit. No problem.

Inspector gives the (carefully edited) books a good going over. Then declares they are generally in order but there are two substantial infractions of the VAT code. Ah bollox. We’ve been rumbled. Panic mode sets in.

He then explains this monster defrauding of Betty.

We had claimed VAT on a couple of IT books. We had also claimed VAT on Small T-Shirts for a Thorn lighting promotion. Books are exempt and size S clothes are exempt as they are classified as children’s clothing.

Total overclaim of £12. Minor adjustment. Otherwise excellent set of accounts.

He thought it was funny. I took the cork out of my jacksie.

If only he knew.
 
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