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Biggest VAT issues for FDs/accountants in industry

What are some of the biggest VAT issues facing businesses right now?

Hi guys,

I'm putting together a few ideas for AccountingWEB content and I was wondering about VAT. (Yes, I was wondering about VAT!)

Obviously, I get VAT is a broad, vastly complex area. But in so far as its possible to answer this, what are the three most pressing VAT issues facing businesses today? Any help kindly appreciated! 

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22nd Feb 2019 10:53

Joke post?

MTD
HMRC bobsing up MTD
Lack of real info about MTD

Businesses not knowing about MTD...oops thats 4

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to Cheshire
22nd Feb 2019 11:17

Is the lack of real info on MTD still an issue? This close to the deadline?

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to Francois Badenhorst
22nd Feb 2019 11:32

Thousands and thousands of businesses have only just found out that MTD is a thing because HMRC have waited until late January to start informing people.

Of course, the clients of the people on here are well aware already because we told them, but there's no obligation for businesses to have accountants and those without could very easily have heard nothing about it until the HMRC letter arrived. Many businesses are yet to receive theirs, five weeks before they're due to start keeping MTD compliant records.

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to Francois Badenhorst
22nd Feb 2019 11:35

Have a wade through some of the latest 'MTD' titled posts. The whole thing is a complete farce.

99.9% of my clients have not yet had a letter from HMRC informing them of the changes. Why oh why should I do the governments job for them? I do, because I want to keep a good relationship with my clients, but the whole thing is an utter mess and that is being polite!

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to Cheshire
22nd Feb 2019 12:17

But it’s ok, didn’t you hear that QB have made it dead easy ?

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to atleastisoundknowledgable...
22nd Feb 2019 13:38

I know! I have several broken TV screens after putting my foot through it whenever I see that advert!

Why is it such companies often show a receipt for coffee on such adverts?

aaaaagggh.

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22nd Feb 2019 10:56

VAT has actually been solved now that MTD is coming and there are no longer any issues.

Namaste

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to Duggimon
22nd Feb 2019 11:18

Duggimon wrote:

VAT has actually been solved now that MTD is coming and there are no longer any issues.

Namaste

Haha, never pegged you as a techno-utopian, Duggimon!

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22nd Feb 2019 12:04

"Value Added Tax is a simple tax."

© A Barber, 1972

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22nd Feb 2019 12:16

I presume that you don’t read any threads on your site?

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to atleastisoundknowledgable...
23rd Feb 2019 10:45

Going by the lack of moderation, nobody from the site reads them!

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22nd Feb 2019 12:36

Off the top of my head:

1) Uncertainty of liability. This affects some businesses more than others, but for some it’s a real headache. If you’re a food retailer then this is a genuine problem. I know of one large retailer who has been waiting since 2014 for HMRC policy to reply with an opinion on a whether or not a particular product should ZR or SR.
2) The sheer complexity of the rules. Knowing a bit about VAT is arguably more dangerous than knowing nothing. Property businesses are a complete minefield, and anyone in this business needs to employ expensive advisors to have a chance of getting the VAT treatment right. This can’t be fair.
3) Brexit. The UK has a habit if politicising tax, which often leads to a more and more complex set of legislation. Previously the UK has been bound by the EU rules on VAT which has kept things reasonably consistent. After Brexit this won’t be the case, and leaves our VAT law open to whichever party is in power to use tax as a political football even more.

I’d argue MTD isn’t much of a concern outside of the smaller end of businesses, which isn’t to say it isn’t a problem at all (given how bad HMRC are at implementing IT projects), but I see this more as a short-term issue for a small number of businesses. If you think MTD is bad, you should see what the Italian tax office has been implementing over the past 12 months or so.

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to sculptureofman
23rd Feb 2019 13:59

sculptureofman wrote:

I’d argue MTD isn’t much of a concern outside of the smaller end of businesses ... I see this more as a short-term issue for a small number of businesses.

Erm, what makes you think that there are only a small number of small businesses? Isn’t 90%of the uk workforce employed by SMEs? Don’t the governments figures say there’s something like 900,000 small businesses (of the size that I think you are meaning, rather than SMEs)?

I think you might find that the 96.4% of all clients engaged collectively by the practicing accountants on this site fall into your ‘small-end’ category and 37% of all posts (62% of ‘genuine’ posts) relate to MTD in one way or another.

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22nd Feb 2019 13:11

Brexit

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By tom123
22nd Feb 2019 13:18

I imagine most large businesses will probably just cobble together something using bridging software - I know I am.

After all, unlike colleagues in practice, they will have only at most a few vat returns to worry about.

I am more concerned about duty/tariffs on imports, intrastat getting more complex, dealing with deferment accounts, and general freight complexity.

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to tom123
27th Feb 2019 14:52

That's really interesting what you say about cobbling something together. Will send you a PM, if you don't mind, to find out a little more!

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By BIGWAL
22nd Feb 2019 19:33

Leaving without a deal will impact on those micro businesses importing from the EU. Will those Amazon traders sourcing goods from Europe will be ready for VAT changes?

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By BIGWAL
22nd Feb 2019 19:34

Duplicated - Sorry

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23rd Feb 2019 07:33

I don't know why all the negativity about MTD.
Firstly, Mel Stride stood up in the House of Commons the other day and said it was a fantastic system and will make everyone's job easier and save time.
Secondly, the daily QuickBooks advert says their software is THE way to deal with digital taxes (they must have inside knowledge of when the other taxes come into MTD as they don't specifically mention VAT.....) and similar sentiments to Mel Stride.
With this fantastic system, we and our clients have never had it so good.

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By Tornado
25th Feb 2019 09:42

From another thread I said -

Mel (Stride) says

‘I can announce today that over 16,500 businesses are now signed up to the service, and I would encourage all those businesses that will be mandated to use Making Tax Digital from April to sign up now and get used to the new service.’

He also says

Stride said HMRC will have written directly to every business that is mandated to join Making Tax Digital by the end of this month (February 2019), with 1.2m letters going out to signpost them to the help and support that they need in order to prepare.

How can he be not the slightest bit worried that only 1.375% of all those that will be mandated to use Making Tax Digital from April have signed up at this stage.

Am I missing something.

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28th Feb 2019 15:08

The vat situation (ESL) and effect of Brexit on current rules when doing business with other EU countries.

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