Couriers - VAT FRS

Low Cost Traders ?

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Has anyone else heard that HMRC are asserting that couriers are not in the transport sector ?

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By mrme89
13th Jun 2017 11:25

if the courier has been using the % for 'transport or storage, including couriers, freight, removals and taxis’ @ 10% without challenge, I don't see how they could now argue that a courier is not in the transport sector.

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Replying to mrme89:
Stepurhan
By stepurhan
13th Jun 2017 11:30

mrme89 wrote:

if the courier has been using the % for 'transport or storage, including couriers, freight, removals and taxis’ @ 10% without challenge, I don't see how they could now argue that a courier is not in the transport sector.

Agreed. Both "transport" and "courier" in the same definition in HMRC's own list. To attempt to split the two now brings phrases related to the ownership of cake and consumption thereof to mind.
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Stepurhan
By stepurhan
13th Jun 2017 11:28

Not that I've heard to date.

If they do I can see someone taking that to tribunal. The restrictions on limited cost trader status are ludicrous already. To seek to also exclude a business that is "transporting" goods as well would be taking the [***].

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By Duggimon
13th Jun 2017 11:28

As far as I'm aware it's not defined in statute but the dictionary or similar definition of the transport sector definitely includes them, I'd say they're on to plums.

Haven't heard of them testing it though.

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RLI
By lionofludesch
13th Jun 2017 11:47

OK - it was mentioned at a seminar I was at yesterday.

We'll see what happens. Obviously early days for this typically poorly-worded legislation.

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Replying to lionofludesch:
By mrme89
13th Jun 2017 12:38

Don't leave us in suspense.

What did the lecturer say?

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RLI
By lionofludesch
13th Jun 2017 13:06

He said HMRC said couriers weren't in the transport sector so they'd be low cost traders.

I think they are in the transport sector.

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Replying to lionofludesch:
By mrme89
13th Jun 2017 13:15

He didn't elaborate, and nobody queried it? Odd.

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Replying to mrme89:
RLI
By lionofludesch
13th Jun 2017 13:29

What's the point ? If I'm going to dispute it, it'll have to be with HMRC.

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By Portia Nina Levin
13th Jun 2017 13:13

Who was the lecheror? There are a great number that just talk out of their arses for the sake of something to say. Such comments should be treated as what they are; farts.

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By DMGbus
13th Jun 2017 13:52

VAT notice 733 latest edition refers to this problem as follows:

" Information regarding the trade sectors and flat rate percentages can be found at Regulation 55K of the VAT Regulations 1995. You would use these rates if you’re not a limited cost business, see paragraph 4.4.
If you’re a limited cost business you need to use 16.5%. "

This can be interpreted as follows:
" you can use the chosen / appropriate FRS rate (eg. 10%) but ONLY if you are not a limted cost trader "

The guidance then goes on to provide an interpretation of "relevant goods" and "limited cost trader".

I think what has emerged (and the lecturer might have been considering) is that many VAT advisors would have interpreted vehicle fuel as "relevant goods" however the guidance says not so, so pushing couriers into the higher than expected LCT FRS rate.

https://www.gov.uk/government/publications/vat-notice-733-flat-rate-sche...

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Replying to DMGbus:
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By Portia Nina Levin
13th Jun 2017 14:02

You don't appear to have appreciated the issue at all. If the individual operates in the transport sector, then vehicle fuel, etc is "relevant goods"; that's the point.

And the point is actually addressed in the VAT Regulations. I have no clue whether it goes on to be reflected in HMRC misguidance:

It says (Reg 55A(4)(a)(i)) that vehicles, vehicle parts and fuel are relevant goods where the applicable category of business is "Transport or storage, INCLUDING COURIERS, freight, removals and taxis".

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Replying to Portia Nina Levin:
RLI
By lionofludesch
13th Jun 2017 14:31

Ah - I knew I'd seen it somewhere !

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Replying to fawltybasil2575:
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By Portia Nina Levin
13th Jun 2017 14:44

I suspect that it's a genuine case of a lecture talking complete guff. It happens so much.

Apologies to any lecturers that I may have heckled in the past, but, inevitably, you completely deserved it!

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Replying to fawltybasil2575:
RLI
By lionofludesch
13th Jun 2017 14:53

I don't think I misunderstood anything, Basil.

However, I'll be relying on the trader trader using that 10% rate reserved for Transport and Storage, including couriers ...

How can couriers be excluded from the transport sector, given that HMRC specifically includes them ?

I agree that, in theory, they could have less than 2%/£250 expenditure on goods but it seems extremely unlikely.

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Replying to lionofludesch:
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By Portia Nina Levin
13th Jun 2017 14:54

You're not going to name the lecheror, so I can roast them, are you?

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Replying to fawltybasil2575:
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By Portia Nina Levin
13th Jun 2017 17:03

I NEVER suggested that ALL lecherors were inept Basil. Many are guilty of just making 5h1t up though, so it sounds like they actually have more practical experience than they actually do.

Thet being said, I have come across some lecherors that are pretty clueless in all respects.

Methinks thou dost protest too much though! :P

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Replying to fawltybasil2575:
By mrme89
13th Jun 2017 18:57

In the words of The Joker ... Why so serious? Let's put a smile on that face.

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RLI
By lionofludesch
13th Jun 2017 19:03

Well, any road, having consulted colleagues on this forum, I might well ask for the source of this wisdom as I don't give it much credence.

I have to say that I raised an eyebrow when he suggested that clients might submit their own stuff into MTD on a quarterly basis and leave us to sort all the errors out in the final submission. After all, it won't be checked and it won't matter if they get it wrong.

Of course, if the client's registered for VAT, that might not be true.

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Replying to fawltybasil2575:
RLI
By lionofludesch
14th Jun 2017 11:40

The lecturer says that it's on "HMRC webinars".

I watched a webinar on LCTs - don't know if it was the same one but I don't remember couriers being mentioned. I do remember some talk of repair shops not being able to count parts as goods which is equally, if not more, outrageous.

Whilst HMRC are specifically including couriers under Transport and Storage on their Flat Rate list, I'm not looking to be doing the LCT nonsense.

Now - how will you take that hat, sir ? Griddled with a little garlic butter?

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Replying to lionofludesch:
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By bendybod
14th Jun 2017 11:42

Your middle paragraph re clients submitting their own stuff because it won't be checked and it won't matter if they get it wrong is basically the response that I got (in fact it's almost word for word the response I got) having raised issues regarding MTD with my MP. The official response was forwarded to me by my MP's office and was from The Treasury. It talks about 'software...using the information that the taxpayer has already recorded and prompt them to send that to HMRC' and 'no requirement for an update to be done by an agent, and no penalty for inaccuracy in an update...'. Clouds and cuckoos spring to mind.

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By The VAT Doctor
13th Jun 2017 22:38

Not contributed for a year or so (sorry, busy earning a VAT living!), but can see that PNL is still hanging 'em before they have taken their oath, making outlandish and inflammatory accusations and Fawlty Basil is the voice of reason. Will check back again in another year to see if anything changes!!

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Replying to The VAT Doctor:
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By Portia Nina Levin
14th Jun 2017 12:18

If that's your annual contribution, I, for one, am glad I waited.

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RLI
By lionofludesch
15th Jun 2017 19:17

Right - I listened to the webinar again. Around the 30 minute mark, there's a question on couriers and the response is that a courier using his own or leased van comes under the 10% transport sector and is grand.

But ..... if he just drives around in somebody else's van (presumably the delivery company's van), he's not providing transport services, he's providing driving services, which won't fall into the transport sector.

More obviously, if he's just a driver, he might struggle to rack up 2%/£250 in goods. Any road (see what I did there?), a courier who provides his own van is unaffected.

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