Hi guys, first post here so I hope I dont sound too demanding!
I've got a client who uses an EPOS to account for all the sales in his convenience store, so traditionally i've been compiling his purchase invoices and then dedecting his VAT inputs from the output tax figure stated in his Z reports. This has been going on for a few years now and although he pays a lot of VAT, typically 4-7k per quarter he does turn over approx £1.1m a year so really it's ok. He then found another guy to do the work for him who managed to reclaim over £20k of overpaid VAT and now had his latest quarterly payable figure down to approx £1k. This new company promises to do this for every client based on their new VAT scheme for convenience stores and will now do the VAT returns for him although they don't do annual accounts so that stayed with me.
We had a look at work and did one of his last VAT returns and although we could reduce it using apportionment we couldn't reduce it at all to the levels of this other guy. The only way to do reduce it massively was to zero rate the commissions received by him from his main wholesaler, but those invoices specifically had the output tax on as they were classed as refunds. The HMRC guidance states (IIRC) that if there is a way of working out the output tax from an EPOS then this figure should be used over any worked out using apportionment.
HMRC have not been consistent on their view of EPOS data. Either it is a record of money received, in which case the retailer can choose a Retail Scheme; or it is the 'Point of Sale' scheme, in which case the VAT shown has to be used. I have seen evidence of HMRC accepting either. The amount of reclaim is not easy to predict, unless someone actually carries out the calculation. AND, you need to make sure that the person doing the reclaim is insured, so that if HMRC challenge/reject the claim, you have some recompense.
