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How would VAT be dealt with if abolished

How would things work if the government abolish vat? Would I have to pay back claimed vat?

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supposing I register for vat tomorrow then claim back for purchases going back 4 years, then as Gove promises(!!!!!!!) abolished Vat. Do I keep that money?? Thank you in advance if you have the answer.

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By Tim Vane
10th Jun 2019 19:33

Nothing Gove promises ever comes true. He’s almost as ridiculous as your question.

Thanks (4)
Hallerud at Easter
By DJKL
10th Jun 2019 20:11

Maybe a tiny issue with still having the goods/assets purchased over the last four years.

Thanks (1)
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By SXGuy
11th Jun 2019 09:55

Basically what happens is, you pay it to me. Message me for my bank details.

Thanks (1)
By ireallyshouldknowthisbut
11th Jun 2019 10:04

The "abolish VAT" nonsense is just that. Nonsense. It would be replaced by a sales tax...............which is something most countries who have tried it have generally abandoned for a system like VAT.

Whilst there is less diddling about on B2B transactions, it means ever business wants to be sales tax regd, so as not to pay any on their purchases, moreover the level of fraud at the purchase level is high. Eg you wave your business sales tax number when out to dinner for the mrs to get it sales tax free.

Its a good way to spend billions of £'s changing a system for a worse one. Hang on............sounds like an ideal government policy!

Thanks (1)
By ireallyshouldknowthisbut
11th Jun 2019 10:04

The "abolish VAT" nonsense is just that. Nonsense. It would be replaced by a sales tax...............which is something most countries who have tried it have generally abandoned for a system like VAT.

Whilst there is less diddling about on B2B transactions, it means ever business wants to be sales tax regd, so as not to pay any on their purchases, moreover the level of fraud at the purchase level is high. Eg you wave your business sales tax number when out to dinner for the mrs to get it sales tax free.

Its a good way to spend billions of £'s changing a system for a worse one. Hang on............sounds like an ideal government policy!

Thanks (0)
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By Vile Nortin Naipaan
11th Jun 2019 10:27

Ooh, look. Someone's painted a new low water mark.

Thanks (3)
Replying to Vile Nortin Naipaan:
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By Accountant A
11th Jun 2019 19:03

Quote:

Ooh, look. Someone's painted a new low water mark.

That one didn't last long:

https://www.accountingweb.co.uk/any-answers/budgeted-payments-to-creditors

Thanks (1)
By Charlie Carne
14th Jun 2019 11:50

Just to be clear, you are asking accountants how a mooted policy will work before its proponent has even thought it through, let alone legislated for it. I suggest asking Russell Grant or Mystic Meg.

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By C Graham
14th Jun 2019 12:06

Eh? First the vat you can claim back is yours anyway. So why the question.

Secondly the rules on recovery are not as simple as all items 4 years pre-reg. There are many conditions.

But thirdly it is such a hypothetical question as Gove is an also ran and this won't happen.

But on the general subject I think it would be far better if the gov abolished IR35 then put all Ltd companies below a threshhold on the flat rate scheme - keeps the process easy, generates more income from small business without directly hitting their income and supports growth of small businesses.

Fact of contemporary workstyle is - there are many freelancer/contractors who prefer the freedom to contract and many employers who want the flexibility of moveable workforce.

Banish IR35 - but putting all those contractors into a flat rate scheme would generate more vatable sales thereby increasing revenue from vat rather than trying to force employers to cover the added costs of employees which is repressive.

If the business can spend less on resourcing by reducing employment costs then it has more income to expand and buy in other services - supporting many smaller niche companies and expert consultants in return.

Far better solution and much more fitting for the models of a modern workforce.

Thanks (0)
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By C Graham
14th Jun 2019 12:08

Eh? First the vat you can claim back is yours anyway. So why the question.

Secondly the rules on recovery are not as simple as all items 4 years pre-reg. There are many conditions.

But thirdly it is such a hypothetical question as Gove is an also ran and this won't happen.

But on the general subject I think it would be far better if the gov abolished IR35 then put all Ltd companies below a threshhold on the flat rate scheme - keeps the process easy, generates more income from small business without directly hitting their income and supports growth of small businesses.

Fact of contemporary workstyle is - there are many freelancer/contractors who prefer the freedom to contract and many employers who want the flexibility of moveable workforce.

Banish IR35 - but putting all those contractors into a flat rate scheme would generate more vatable sales thereby increasing revenue from vat rather than trying to force employers to cover the added costs of employees which is repressive.

If the business can spend less on resourcing by reducing employment costs then it has more income to expand and buy in other services - supporting many smaller niche companies and expert consultants in return.

Far better solution and much more fitting for the models of a modern workforce.

Thanks (0)
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