December 2, 2008

Changes to the VAT rate

We know that you will be very busy at the moment supporting your clients with all the new changes.

For retailers it is often easier to calculate a discount of 2.10% of any VAT inclusive retail selling price rather than re label all items. This discount equates to a 2.5% reduction to the VAT rate.

Flat Rate Scheme

Many of you assist your clients in the operation of their Flat Rate Schemes.

We understand that HMRC are visiting Flat Rate Schemers and using a newly developed piece of software to verify the Returns rendered. It collates the value in Box 6 of the Returns together with the Flat Rate VAT declared and then checks this against the total income generated by the business.

As often happens the incorrect value is shown in Box 6 (it should be the gross turnover for the period) so  it is easy for HMRC to conclude that income has been under declared.

If any of your clients are challenged in this way we suggest you start by verifying the Box 6 figures are in fact correct.

Elysian Associates

December 2008


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