I will be presenting at Business Expo 2011 at the Telford Whitehouse Hotel on Thursday, 17th March, 2011. Full details are in the PDF below.
It would be great to see you there.
February 28, 2011
February 22, 2011
Can I claim back VAT on employees mileage claims? Nigel from TaxAssist in Shrewsbury has the answer
Q: A number of my employees use their own vehicles for business purposes. they submit a monthly expenses sheet to me and I then reimburse them using the HMRC approved mileage rates. Can I claim back any VAT on these amounts?
A: Yes, but unfortunately you will not be entitled to claim back VAT on the full amount. Instead you can reclaim the VAT applicable to the deemed fuel element of the mileage rate and you need to ensure the employee submits a valid VAT receipt in support of the claim.
The fuel element of the mileage rate currently varies between 9p and 21p, and depends on the size of the engine and the type of fuel being used. The rates are available from www.hmrc.gov.uk.
The requirement to submit a valid VAT receipt was introduced as a result of a ruling made against the UK in March 2005. In that case, the European Court ruled that the UK legislation which allowed employers to reclaim the VAT element on mileage claims submitted by employees was in breach of EU legislation for two reasons:
- the purchases are actually supplied to the employees as private individuals and therefore the employers have no right to deduct because the goods are not supplied to them as taxable persons.
- even if there were a right to deduct, employers as taxable persons cannot exercise that right because they do not hold a VAT invoice.
The UK government has therefore introduced secondary legislation which allows employers to recover the VAT on fuel purchased by their employees for business purposes, as long as they hold a valid VAT invoice in support of the claims that are submitted.
February 12, 2011
TaxAssist Accountants topical news now available here
Please click on the link below to get our latest topical news issue.
Get ready for when the taxman calls, small businesses
are urged…
February 9, 2011
Nigel from TaxAssist is pleased that HMRC are changing the way they deal with incoming mail
Responding to growing pressure from tax professionals and accountants, HM Revenue Customs have just announced plans to scan all incoming post. The HMRC website explains
“HMRC receives millions of items of post each year in relation to enquiries into customer returns. To manage this process more efficiently in the future, they intend to scan incoming post…….
Scanning enables HMRC to create electronic images of the post received. The scanned material will be assigned to cases using electronic document management systems.
Scanning will be introduced in phases. The first phase of the roll out will begin in March 2011 and will continue in phases during 2011/12.”
February 7, 2011
Nigel Lomax of TaxAssist Accountants in Shrewsbury answers a commonly asked question about VAT
Tax Point of a Transaction for VAT
Q: I have recently registered for VAT and I am getting slightly confused regarding when my supplies and purchases take place in regards to VAT quarters. Could you please explain to me when a transaction takes place for VAT purposes?
A: The date when a transaction takes place for VAT is called its tax point. It is not always the date the supply is actually made. It is vital that you apply the correct tax point to a transaction to ensure that the VAT is declared on the right VAT return and at the correct rate.
The basic tax point is the date at which the goods are made available to the client (or for services the date they are performed). If a VAT invoice is issued before this date, the date of the invoice becomes the tax point. Similarly, if payment is received before the goods are supplied/ work is done, then the date of payment becomes the tax point.
The date a VAT invoice is issued will also become the tax point if it is issued between 1 to 14 days after the supply takes place. If an invoice is issued 15 days or more after, then the date of supply remains the tax point.
It is possible to raise a pro-forma invoice for goods which you have not yet supplied or received payment for. A pro-forma invoice is not a VAT invoice, but it does enable the business to raise a sales document. No VAT is due on this document and it must be clearly display a message such as ‘This is not a VAT invoice’.
February 2, 2011
Impact of new tax and NI allowances on CIS sub-contractors
The dramatic increases on 6th April, 2011 in the income tax personal allowance (from £6,475 to £7,475) and the National Insurance Class 4 lower profits limit (from £5,715 to £7,225) will mean that most sub-contractors who are stopped the main rate of CIS tax (20%) will be entitled to larger rebates on their 2011/12 tax returns than in the previous year. This is despite the 1% increase in the Class 4 NI rate from 8% to 9%.
For example, in 2011/12, a CIS sub-contractor with CIS sales totalling £20,000 and tax-deductible costs of £2,000 will get a rebate of £745 (compared to £552 on same earnings in 2010/11.).
Assuming the same tax-deductible costs of £2,000, the level of CIS sales at which no rebate is payable rises to c£30,000 (from £29,000).
