Anyone aware of, or have any ideas of, what will be happening with VAT within the next couple of years?
Wondering whether the principles will stay the same and it being rebranded, or will it be scrapped and replaced with some other indirect tax.
For me personally I've been considering taking the ATT VAT paper, yet obviously if it is to change too much there is no strength in the syllabus. But then the Law paper CBE is in most part centred around the ECJ legislation, much like a fair amount of ACCA F4.
Lost as to what to think and do.
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Johnny - Owner of an overly-active keyboard.
A man who can read, yet doesn't, is in no way wiser than a man who can't.
Indeed. PSC's to take a massive hit - HMRC love that group of folk. Again, similar thought from another thread about the tax gap - if 2/3 within the FRS voluntarily registered, (<83000) how do HMRC plan to recoup £130m each year? Folk will surely deregister??
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Johnny - Owner of an overly-active keyboard.
A man who can read, yet doesn't, is in no way wiser than a man who can't.
HMRC knew jerk, not thought through process change, as ever. Recoup - probably by fining everyone else for missing deadlines for MTD!! or our taxes will see a sudden hike.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
A bit harsh Joanne, I know some of their staff are not fully clued up, but still......
On a serious note, it is a knee jerk reaction yes. Certain industries benefit from FRS in a way that was never envisaged. CIS and contractors to name but two. Contractor bills place he is working for, adds 20% VAT, pays between 12 and 16% over and pockets the difference. What they haven't taken into account is they also gain an extra 20% corporation tax on that "profit" and by not allowing fuel and services, penalises those whom the FRS was intended for.
It affects one of my clients, which I'm not too worried about, as he will be better off under traditional VAT than the new, effective rate of 18.99%, and I will simply switch him over from 1st April.
I have seen a loophole suggested, but on looking at it means more work for the client and to me isn't really worth mentioning. He benefited under FRS, but nothing is set in stone, and you adapt to the rules.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
Indeed. PSC's to take a massive hit - HMRC love that group of folk. Again, similar thought from another thread about the tax gap - if 2/3 within the FRS voluntarily registered, (<83000) how do HMRC plan to recoup £130m each year? Folk will surely deregister??
HMRC will actually benefit. Guy invoices £50k + VAT at £10k. That 10k is claimed back as VAT expenses. Lorry driver pays 10% of 60k so pays 6k VAT. HMRC think they have lost 4k, but actually its 3.2k after corporation tax.
Multiply that by the amount of contractors, lorry drivers and CIS bods that are on FRS and I can understand the reasoning behind it, although as I said to Joanne, it penalises some who are on FRS for genuine reasons. They've used a sledge hammer to crack a nut imo, and the simple answer would have been to disallow the previously mentioned being on FRS.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
A bit harsh Joanne, I know some of their staff are not fully clued up, but still......
On a serious note, it is a knee jerk reaction yes. Certain industries benefit from FRS in a way that was never envisaged. CIS and contractors to name but two. Contractor bills place he is working for, adds 20% VAT, pays between 12 and 16% over and pockets the difference. What they haven't taken into account is they also gain an extra 20% corporation tax on that "profit" and by not allowing fuel and services, penalises those whom the FRS was intended for.
It affects one of my clients, which I'm not too worried about, as he will be better off under traditional VAT than the new, effective rate of 18.99%, and I will simply switch him over from 1st April.
I have seen a loophole suggested, but on looking at it means more work for the client and to me isn't really worth mentioning. He benefited under FRS, but nothing is set in stone, and you adapt to the rules.
Oops. I really should start wearing those bloody glasses. It's not that I'm vain, I just forget and I lose them. I bought another pair, one for upstairs and one for downstairs but they are either both together where I'm not. Or separately, well, just lost! Doesn't help that my iPad has a mind of its own when it comes to spell checks and predictive nonesense.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
