Transport outside EU, Not VATABLE, VATABLE, NOT VATABLE... make up your mind!

Image this. You book a lorry to transport some goods for you from the UK to Greece. The driver plans a route across Europe to Italy, through the countries to the east of the Adriatic Sea and into Greece.

Before January 1 the supply was in the country where the activity physically took place, to the extent that it took place there. That meant that supplies physically performed outside the EU were outside the scope of VAT. No VAT.

Since January 1 you would be liable to calculate VAT on this service on the whole journey, even though some of this service was provided outside the EU. This is because the rule became that the service was provided where the customer was based. So now you had to self supply, i.e. charge yourself and claim it back. This means you may pay VAT on services provided outside the EU.

Now from March 15 if the transport is outside the EU, no VAT is due.

The change on 15th March was to correct an unintended cost to business. How is business intended to keep up with these changes, why can’t the people who make these regulations live in the real world of running a business... and what happens if the driver has a girlfriend in southern Italy and gets the ferry from Italy to Greece without telling you! Now the journey is wholly in the EU and you don't even know!

Just Change the law if you don't like it!

HMRC have lost most court cases in the self employment/employment debate. So they have taken the easy way out and they are changing the law so that they can win! They want to deem who is employed in the construction industry,

Maybe just new rules to understand?

What is the tax gap?

What is the tax gap? It is the difference btween what HMRC think they should collect and how much they do collect. £40 billion!

Hope they don't ask me for it!

Do it Now!

The press say that an incoming Conservative Government would reduce both the small company rate of Corporation tax to 20% and the main rate to 25%but would pay for it by abolishing the Annual Investment Allowance. Many business intending to invest in equipment over the next year or so are warned that now rather than later would be an excellent move, with the availability of the AIA under threat, and first year allowances of 40% also available for just one more month. A spend of £500,000 now would attract £230,000 in capital allowances, but later this could be as little as £100,000.

Sneeky new way to raise penalties?

From 1 April 2010 all cheque payments by post will be treated as being received by HM Revenue & Customs on the date when cleared funds reach HMRC's bank account. So if the cheque does not clear by the due date shown on your VAT return you may be liable to a surcharge for late payment.

Is this the "Minister for Change" just doing their job, or an encouragement to make electronic payments, or is the country so desperate for money that it has to find any method to raise extra cash?

Is HMRC a "fence"

“A fence is an individual who knowingly buys stolen property for later resale in a (usually) legitimate market”. (From Wikipedia),

According to the Financial Times HMRC are considering buying stolen information from Swiss banks. Receiving stolen goods is a criminal action in the UK, do readers think this is another case of double standards at HMRC?

Avoid 5% Penalty

Any income and national insurance that is due under the self aeeseement scheme and not paid by the end of February will attract a 5% penalty.