New reporting requirement for FRS businesses
New reporting requirement for FRS businesses
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Review how much VAT charged on sales?
A recent Tribunal case ruled that HMRC’s logic was flawed in dealing with a “what is the supply” challenge. Does this mean you should check that you are charging VAT correctly on your sales if there could be doubt about what you are selling?
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Are buy-to-let companies worth the hype?
There’s no doubt that landlords have been on the receiving end of multiple tax hikes in recent years. So called “property experts” will tell you that the best tax-saving strategy is to operate through a company. Are they right?
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Electronic VAT return
HMRC’s latest Business Brief sets out the new rules which will apply for VAT return periods commencing on or after 1 June 2022.
The change is needed to correct HMRC’s previous guidance regarding FRS-registered businesses that used postponed accounting for imports rather than paying VAT at the point of entry to the UK. Previously HMRC's guidance was to include the value of imports in their FRS turnover, whereas the legislation says it should be excluded. As a result, many businesses have underpaid VAT, while some have overpaid. The good news is that HMRC is not asking businesses to repay any VAT that has been underpaid as a result of its earlier guidance but will allow those that overpaid to claim a refund.
All FRS-registered businesses using postponed accounting must from the beginning of June 2022 exclude the value of imported goods from their turnover liable to the FRS rate. Instead, they must work out the VAT payable at the normal rate applicable to the goods and include this amount in Box 1 of their returns.
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