How we prevent VAT problems

How we prevent VAT problems

I was recently having a drink with a really good, old friend and laughed when he asked me what do we actually do?  It was funny given that I set up AVS in 1994 and I’ve known him for longer than that but it made me realise the answer it isn’t really obvious is it.  Something to do with VAT clearly, but what?  So here we are heading for the end of an amazing year and I thought I could share a few of our high points about how we prevent VAT problems and maybe answer his question.  Here goes – besides a whole heap of miscellaneous queries we do a lot of work:-

Reducing VAT costs – As VAT works on a ‘guilty until proven innocent’ basis we spend a lot of time basically splitting hairs and working out what is inside a VAT relief and what isn’t.  Often VAT has been paid in error so we might go on to help secure refunds and handle unjust enrichment arguments.  This year we’ve worked on some really interesting projects including –

  • DNA extrapolation services for rebuilding knee cartilage;
  • Music tuition proving why VAT isn’t due;
  • Psychological screening services in schools;
  • Children’s clothing including hooded towels;
  • Sport pitch hire and league management exemption;
  • Vocational training including sub-contractors;
  • Problems and solutions with VAT Grouping, and (not forgetting)
  • Lap Dancing and the age old Agent versus principal argument.

Side-stepping VAT problems – To my mind there is much more value in being clever and not having a problem than fighting appeals so we do a huge amount of work under this banner.  This year we’ve done some great work on –

  • Theatre ticket agency services – putting a structure in place to ensure that taxable turnover is limited to the commission element;
  • Setting up a structure to secure the ongoing separation of two outlets that HMRC might otherwise have tried to bring together;
  • Arranging for a start up to come within TOMs rather than face multiple EU VAT registrations;
  • How the cross-border rules could be made manageable in a number of different situations involving moving goods around the EU where services were also being supplied;
  • Disposals of cars being written off by an insurance company;
  • Securing import VAT claims on equipment routed here and on-shipped without having the right authorities in place at the beginning;
  • Various charities in addressing business -v- non-business activities, partial exemption, setting up systems to aid attribution and bespoke Excel workbooks.

Lots of other interesting projects including –

  • Getting the registration angle right, which is a neglected art and leads lots of people to missing out so this year we helped several intending trader registrations relating to property where HMRC were trying to block our clients from having what they were entitled to;
  • Unravelling numerous property developments where the arrangements weren’t on the right footing but we got them organised and neutralised the VAT issues;
  • The inevitable situations where things have gone wrong including deliberate penalty and COP9 cases and our clients needed help to negotiate the best possible outcome.

The list of how we prevent VAT problems is almost endless but if you’re ever not sure about VAT related then please give us a call. Remember sooner is always better.

Posted in Case Study.