VAT do's and don'ts

When it comes to VAT, HJS Accountants can advise businesses in the Southampton area on some of the important steps to take – and the pitfalls to avoid. This article considers some important VAT Do’s and Don’ts.

  • DO keep a monthly record of your turnover if you are not yet registered for VAT - late registration can result in severe penalties
  • DO notify HMRC when major changes take place - changes must be notified to HMRC within thirty days
  • DO retain records for the last six years - these could be demanded by law
  • DO obtain and keep VAT invoices - these are your authority to claim back VAT on supplies made to you
  • DO charge VAT on supplies made to your staff
  • DO charge VAT on any equipment or vehicles (except motor cars) that you sell or part-exchange
  • DO account for VAT on fuel used for private motoring using the appropriate VAT scale charge
  • DON'T claim the VAT paid on the purchase of a motor car - it is not recoverable except in some very exceptional cases
  • DON'T claim the VAT paid on goods or services used for private purposes. Where there is an element of private use (e.g. telephone) an appropriate percentage should be claimed. Special arrangements apply to private use of petrol (see above)
  • DON'T claim the VAT paid on entertaining (except for reasonable, relevant costs of entertaining overseas customers or costs incurred in providing entertainment to employees)
  • DON'T forget to account for VAT on inter-company charges
  • DON'T charge VAT on the sale of business assets where the transaction qualifies as the transfer of a business as a going concern (make sure contracts incorporate appropriate VAT provisions)

If you’re in the Southampton area and would like to discuss VAT in more detail, please contact the team at HJS Accountants.

Southampton Office

HJS Accountants
Tagus House
9 Ocean Way
Southampton
Hampshire
SO14 3TJ

Tel: 023 8023 4222

Winchester Office

HJS Accountants
6 Charlecote Mews
Staple Gardens
Winchester
SO23 8SR

Tel: 01962 842000

Reading Office

HJS Reading
3 Richfield Place
Richfield Avenue
Reading, Berkshire
RG1 8EQ

Tel: 0118 951 1115