VAT is one of the more complex areas of finance. As someone running a business, it is easy enough to make mistakes with it and fail to correctly comply with the rules. Errors like these can be very costly. Furthermore, if HMRC thinks that you were sloppy or intentional with your errors, you can face penalties from 15%-100% of due VAT as well as payable tax. For assistance navigating all the rules and regulations with VAT, you can count on the most dependable people for VAT returns in Walthamstow – our team!
Our aim with this article is to detail some common errors with VAT. The information should help you to avoid making them too.
Property
This is one of the trickiest areas when it comes to VAT. The biggest amount of VAT is at risk with property. The following all have complex rules:
- Building and construction services
- Owner-occupying property
- Rental and letting businesses
- Selling and buying property
Furthermore, while some transactions might appear similar, they can have different rates of VAT. So, the best thing to do is seek out advice so that you do not make errors.
Not typical business transactions
Mistakes can happen when a business has dealings not standard for their normal trading pattern. This could be transactions such as:
- Asset disposal
- Barter transactions
- Bonus or incentive payments
- Cross-border transactions
- Charging the right VAT rate on new services and goods
- Cash sales
- Intra-company management charges
- Property expenses or income
- Recharges of expenses
- Sub-contract payments
- Supplies of staff
There are different rules that need applying for each of these dealings. Essentially when making any new transaction or one that is not usual for your business, you should be careful and question it. As a result you can ensure you deal with it in the correct manner.
Business entertaining
Generally, you cannot recover input VAT on business entertaining. This might include:
- Accommodation
- Concert and theatre tickets
- Entertainment that is available only to partners or directors of a business
- Food and drink
- Sporting facilities and events
You can usually recover VAT when supplied to an employee but it is important to take care. If a business entertains an employee along with someone who is not one, you can split the costs and then recover some of the VAT.
Ensuring VAT returns in Walthamstow are done properly
With all the rules and regulations around VAT in the UK, it does not take much for a business to make a genuine mistake. No one wants to be subject to penalties or an investigation. So, you should seek out those who can help you complete VAT returns in Walthamstow. Brian G. Lonis & Co offers premier services so even if you struggle with VAT, you do not have to worry as we have an expert understanding of this tax. In fact, we also offer our services for auditing, bookkeeping, and more.
Whatever you need assistance with, reach out to our team and we will make sure you get the support with your finance that you require.