VAT Lawyers & VAT Specialists
VAT ought to be straightforward: a business charges its customers VAT on its sales, gets a credit for the VAT it incurs on its own expenditure, and accounts for the difference to HMRC, usually every quarter. There are however many reasons why businesses can end up losing out.
A common error is charging your customers the wrong rate of VAT or being overcharged VAT by your suppliers. Most businesses know the correct VAT rate for the goods or services they buy and sell, but sometimes a product can have a slightly different characteristic so it may tip into a different rate; and sometimes perhaps due to a diversification of the business, a product may be significantly different and be subject to a VAT treatment which is unfamiliar.
Another trap is to start making sales which are exempt from VAT, which can restrict your ability to reclaim VAT on your expenditure. This is particularly common when a business is selling its premises or letting part of them out. For example, if a retail business bought new premises for, say, £1m plus VAT, it would reclaim the entire £200,000 of VAT at the time it buys the premises, but if it sold the same premises after 5 years without taking any further action, it would face a bill from HMRC for £100,000. This is known as a capital goods scheme clawback, and it’s a situation which can’t be remedied once it happens. A nightmare.
The VAT rules relating to property are particularly tricky, so much so that without specialist VAT advice, a business is unlikely to get everything right.
Our tax team can advise you on all aspects of VAT. We can ensure that you are applying the rules correctly, that you understand the implications of undertaking any proposed transaction, and that you have taken any steps to avoid any unnecessary VAT costs. If you are being pursued by HMRC for VAT then we can help you and perhaps get an assessment overturned if we can identify sufficient technical grounds.
Julian Moran leads the Tax team at Lupton Fawcett. He has been advising on business tax matters since qualifying in 2002. Julian is based in our Leeds and York office. Sarah Illidge is a senior solicitor specialising in tax, and is based in our Sheffield office.
Contact Us for Help
If you need tax advice or you would like to discuss a tax issue affecting your business, please contact our Yorkshire offices by calling 0333 323 5292. Alternatively, fill in our enquiry form and a solicitor from our Tax Team we will get back to you as soon as possible.