What are the Top 10 VAT Inspection Errors that Seasoned Accountants Avoid?

When it comes to calculating the VAT a professional accountant cannot be lackluster, as it will invite a plethora of troubles in the form of errors that will put the clients in rough weather. That is the reason you must opt for a quality accountant, who will come up with some error-free VAT inspection. Therefore, when it comes to picking up a name for VAT inspection, you must hire the best in the industry. What better name can you think of, than Biz Accounting Solutions Ltd? Indeed, our highly trained and skilled experts will come up with some impeccable service that ensures they will never commit the following VAT inspection errors.

VAT on Fuel

There are a number of businesses that tend to reclaim VAT on the fuel that they procure for business purposes. However, while doing so, they do not restrict the proportion to the fuel that is used exclusively for business purposes. As per the HMRC norms, it is imperative to show the detailed mileage records that will support such claims. While these minute mileage logs are pretty labourious and arduous to maintain, businesses have to pay a scale charge as an output tax, to keep an account of the fuel that was purchased for personal use. This is where the majority of mistakes are made, wherein the accountant makes mistakes while calculating the personal usage amount of the fuel. Here is where our accountants in Reading or elsewherewould make the difference with their skill and expertise.

VAT on Vehicles

The HMRC does not permit recovery of VAT on the purchase of a vehicle for the use of business unless it is shown and confirmed that the car is, and can be used exclusively for the business purpose. HMRC allows reclaiming of VAT only when the strict conditions in regards to its use are met. This is another area where the accountants make an error while calculating the VAT. Another very common error is a charge of 100% of VAT as input tax, in the case of vehicles that are used only for business purposes. The input tax recovery, in this case, should be limited to 50% – something that our tax advisor in Wokingham or other locations will always follow.

Claim of VAT on Non-vatable Items

At times, businesses will end up claiming VAT on non-vatable items like air and train fares, cabs, and taxi fares. This is a mistake, as passenger transport expenses are zero-rated as per HMRC rules. This is another mistake that our experts will save you from.

Error in Regards to VAT on Deposits

Often businesses would receive deposits from their customers while accepting the order of goods or services from them but would fail to charge for VAT on these payments till they receive the balancing payment. This is an error that our accounting professionals will never indulge in.

Missing our VAT Charge on nonstandard supplies

Businesses generally never commit any mistakes while charging VAT on their core supplies. However, when it comes to charging VAT on something out of the box, there is every chance of committing mistakes. This is where our Accountants in Barkham and in other cities would make a difference with all their experience and skill.

Reclaiming Input Tax Without any Supporting Invoice

For recovering the VAT that is incurred on expenses, businesses have to provide supporting VAT invoices as evidence for the expenditure. However, they would fail to do so and still claim the VAT, leading to refusal. This is another area, where our accounting experts will make a difference.

Charging VAT on Reverse Charge Receipts

With a large number of business activities getting international, notwithstanding the pandemic constraints, more and more businesses in the UK are now getting supplies from overseas.  Thus, invoices that are received from overseas businesses will not be included in UK VAT. But then, they are at times included by the accountants. So that’s a mistake and our accountants in Hurst and elsewhere will never commit and will adhere to the reverse charge procedure.

Charging VAT on Entertainment

HMRC would never allow charging VAT on entertainment. Many businesses would not appreciate that and will consider charging VAT on it, arguing and considering that to be a business expense. As an example, they would often show the instance of taking a client for lunch. However, the rule is that any practice of entertainment is excluded from input tax recovery, and accountants looking after VAT have to be strict on this. This is something our accountants will always have a strict vigil on.

Import VAT errors

Our accountants would never commit any mistake while importing VAT following the receipt of the official documentation from the HMRC as evidence of the import, called the C79 certificate. It is generally received almost 3 weeks following the month-end during which the goods reach the company in the UK.

Errors while dealing with aged creditors

A number of businesses have to deal with bad debt relief rules days in and days out for applying to claim VAT on the unpaid debt. However, most of these businesses do not understand that they have to repay the input tax to the HMC on the invoices which have been recovered from the suppliers, with their payments still remaining outstanding for over 6 months. This is what our tax advisors in Mortimer Common or elsewhere will keep a close eye on the same.

Final Words: Liabilities on VAT

Mistakes do take place in the accounting world and tax and VATs are no exception. Indeed, to avoid mistakes, HMRC has come up with dictums and has a dedicated regime that deals with mistakes and their consequences. VAT, by its very nature, is unique and any mistake in the calculation and claims will directly affect the customer at the end of the day and the business that has charged the VAT amount wrongly.  That is why, you need to be indeed very cautious in calculating the VAT and that is also the reason, why you need to put stakes on the very best.

This perhaps tells you why we at Biz Accounting Solutions Ltd are so famous for our experience, skills, and perfectionist approach. Call us at 44 7877224964 or 01183 671854 during our business hours.