When it comes to VAT, MMK Accountants Ltd can advise businesses in the Canary Wharf & Luton area on some of the important steps to take – and the pitfalls to avoid. This article considers some important VAT Do’s and Don’ts.
- DO keep a monthly record of your turnover - late registration can result in severe penalties
- DO notify your local VAT office when major changes take place - changes must be notified within thirty days
- DO retain records for the last six years - these could be demanded by law
- DO charge VAT on supplies to your staff
- DO charge VAT on any equipment or vehicles (except motor cars) that you sell or part-exchange
- DO account for VAT on fuel used for private motoring using the appropriate flat rate valuation
- DON'T claim the VAT paid on the purchase of a motor car - it is not recoverable except in some very special cases
- DON'T claim the VAT paid on goods or services used for private purposes. Where there is an element of private use (e.g. telephone) an appropriate percentage should be claimed. Special arrangements apply to private use of petrol (see above)
- DON'T claim the VAT paid on entertaining (except for reasonable, relevant costs of entertaining overseas customers)
- DON'T forget to account for VAT on inter-company charges
- DON'T charge VAT on the transfer of a business as a going concern (make sure contracts incorporate appropriate VAT provisions)
If you’re in the Canary Wharf & Luton area and would like to discuss VAT in more detail, please contact the team at MMK Accountants Ltd.