Neil Warren is an independent VAT consultant and author who worked for Customs and Excise for 14 years until 1997.
What happened to prices on 4 January ?
The potential issues of these cases are massive - and will need a lot of thought and analysis.
However, as an opening tip regarding protective claims for the last four years, find out how your takeaway food clients dealt with the VAT increase to 20% on 4 January. Did they absorb the VAT rise from 17.5% to 20% within their existing prices or did they wholly pass it on to customers with an increase? If the latter, this gives a clear opening to HMRC that any past rebate must be blocked anyway under 'unjust enrichment' rules, irrespective of other issues.
Neil Warren (VAT Consutlant and Speaker)
FRS not good for zero-rated income
The FRS is not ideal for any business that has an unpredictable level of zero-rated income or, in fact, income that is subject to 5% VAT. Builders tend to be one of the main traders with this problem - and unfortunately, the best outcome is to probably withdraw from the scheme if the figures work against your client. You can then rejoin again in 12 months time if appropriate.