Issues with VAT are quite common, either because of certain specific complications that every business has to deal with or because the businesses in question do not have the appropriate mechanism in place.
Besides, crisis regarding the cash flow can also surface up, when businesses fail to preserve enough fund for paying the VAT bills. This is where the professionals would come in handy, in helping them to tackle these issues.
Here are some primary VAT return problems that people have to deal with the help of the professionals of reputed accounting companies in the UK.
Supplies for no-business or personal use
This applies in the following scenarios:
Free Accommodation to the Employees
It is another area of vat return in London, which raises a lot of confusion, and demands the intervention of the professionals. Generally, one cannot reclaim input VAT, unless the employees are provided with domestic accommodation entirely for business and the HMRC agreement is obtained.
Meals at Work for the Sole Traders, Directors and Partners
Businesses cannot reclaim VAT on meals for their employees at work, though they can claim subsistence expenses that are incurred during business trips.
Entertainment Expenses for the third Parties
In case of entertainment expenses incurred for the employees as well as for the outsiders, a part of the VAT can be reclaimed and this is where the intervention of a professional VAT return expert in London can come in handy.
Treatment of Output VAT in Special Cases
Business Gifts
Output VAT is generally applied to the full value of the business gifts. However, there are certain exceptions, like free samples offered to the customers, gifts that cost less than £50, the gift of services, or goods meant for charity.
Taking Stuff for Personal Use
In case no cost is paid, VAT is applied to the price (usually the market cost), treating it as a sale. However, when it comes to cars and fuels, special rules apply.
Well, there are a number of other pain areas regarding VAT return in the UK. It is for the professionals who would take care of the issues and guide their customers properly.
Why MUST you be careful with the VAT return?
The main reason for hiring professional VAT return specialists in Oxford Circus is that any mistake in this regard will attract huge penalties and surcharges.
Failure to pay or submit VAT return will carry a fixed surcharge of up to 15 per cent, depending upon the number of times the payer of VAT defaults within a period of 12 months.
That is why it is always important to put your money on a reputed accounting company with years of experience under its belt.
The author is a professional accountant who is a VAT return specialist in Oxford Circus, London. The author is also a regular blogger.