A couple of weeks ago I gave my notice to a client I've wanted to get rid of for ages. I advised that they contact their accountant to try to find someone else and that I would stay until they found someone and handover.
Well they interviewed someone and I met them this week. I was explaining the foibles of the situation (the company is a care home which is VAT registered, registered in 1992 to take advantage of a loophole to claim VAT back on a large refurbishment and has never de-registered - I've researched and am 99.9% sure they could de-register without having to pay back but the accountant doesn't seem to think so - although other accountants do).
Anyway to complete the quarterly VAT return I have had to (well Sage has) work out the VAT on expenditure then after the return has been done journal all the VAT back to the relevant nominal codes. I explained this to the new book-keeper who thought that the company could claim the VAT back ha ha ha. I explained that you could not claim VAT back on exempt 'sales/income'. She begged to differ (Did she think I was an idiot who had been doing this for years incorrectly - my professional hackles were well and truely rising). So she asked if she could telephone the accountant, I told her to go ahead (this was in front of the director and the manager) well she did and found out I was right. But I was really miffed that someone had the gall to question and disbelieve me, probably to try and show her superior (or in this case not) knowledge.
Whilst I know no-one knows everything and I, like everyone else, am learning all the time, I really think this is totally unprofessional behaviour.
you feel free to have a rant on here anytime you like.
At least in this situation the new bookkeeper showed themselves up in front of the client whilst you were there. Much better than situations when the new bookkeeper slates the outgoing one behind their back when they can't defend themselves.
Personally I hate it when you get consultants straight out of Uni who assume that everyone who went before didn't have a clue what they were doing... I just can't imagine how we managed to keep industry ticking over until we were lucky enough for them to come along and save us all.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Yep that's what I said Steve. It's a whole minefield when you are dealing with exempt supplies. Usually if all your supplies are exempt you don't register for VAT (you don't have to no matter what your turnover). However, some companies, particularly charities have some exempt and some taxable supplies in this case you can claim for money spent with regard to the taxable supplies but not for the exempt supplies.
In the case of care homes all their supplies are exempt ergo they can't claim but back in 1992 there was a window of opportunity and this particular company took advantage of it. Following a case and I can't remember it's name right now care homes are currently able (provided they've got all the records) to claim for refurbishment costs going back to this period by registering for VAT and then when they have got the refund de-registering. It's only of much worth to companies where the majority of their clients were funded by the local authorities because they can back bill the LAs with the VAT which they then reclaim. For any private clients the care home has to carry the VAT on the invoices therefore decreasing the amount they can claim. There have been loads of the "no win no fee" type firms targeting care homes in the past few years to take advantage.
I assume then that because its a care home then everything they purchase regardless is exempt, why have they made a ruling like that, is it because of the service they supply?
-- Edited by Rhianrach on Friday 18th of June 2010 08:10:17 AM
No Steve, everything they purchase is not exempt its a mixture like any other business.
You can't claim vat inputs against exempt outputs. However, if a company makes exempt outputs and standard rate outputs the expenditure from the standard rate outputs can be classed as inputs but the expenditure against the exempt outputs can't.
No Steve, everything they purchase is not exempt its a mixture like any other business.
You can't claim vat inputs against exempt outputs. However, if a company makes exempt outputs and standard rate outputs the expenditure from the standard rate outputs can be classed as inputs but the expenditure against the exempt outputs can't.
Now that has got to be difficult to work out when you first get going with it. How do you figure all that out?
