IF anyone could help me....I have a client who has just started his own resturant business. In his first month he owes the tax man £1105.00 as VAT. Is there anyway of him reducing this amount as it is a new business?
However, he/you ought to be aware of the difference between 'normal accounting' and 'cash accounting' for VAT purposes.
Next point, are his calculations correct ? Has he included Capital Expenditure (all kitchen equipment, tables, chairs, air conditioning, bar fitting, electrical equipment (radiators and/or central heating), waste bins, etc, etc)
Clients do have to realise that the VAT they receive is not their money at all - so being a new business, a small business etc should really not make much difference.
There are things like the Flat Rate VAT scheme to help reduce the administrative burden on small business.
You should be able to keep your client in the know on his financial situation, regular reporting and management accounts will help him realise what his liabilities are!
And as JWB mentioned - are you sure everything's included? For a start-up restaurant I'd be surprised if he owed that much already (unless he's not "just started").
"You can generally reclaim VAT on goods you bought up to three years before you registered for VAT, and services you bought up to six months before you registered."
