VAT Query

James,_Oxford

As it is an invoice the information is in the numbers, rather than words.

As you think my argument is naive, please can you tell me how Sch 6 para 4 works. I would be interested to know your perspective.

James,_Oxford

Sue

What do you think Sch 6 para 4 of the VAT Act does then?

Is it just to be ignored? If you think it operates in a different way please enlighten us?

James,_Oxford

If you are reading this thread you have probably worked out that I think this idea works whilst quite a few others think that it is wrong or even fraudulent.

Please remember this is only a forum, so don't rely on what I have said. If you are interested in this go and speak to a good tax adviser quoting Sch 6 para 4 of the VAT Act as well as para 7.3 of the VAT Notice 700.

If you just not that serious but would like to know whether anyone else agrees with me then do a google search on 'VAT prompt payment discounts'. Try and find a reputable source such as a reliable tax handbook and see what they have to say about it. You may be surprised!

I'm not going to post anything more on this.

coldstar

What would actually happen if you tried this?

I suspect the VAT man would say it was done solely for the purposes of tax avoidance and hence would demand VAT on the full amount and also fine you, they would probably also go through your VAT records with a fine tooth comb for the last 6 years. Its also possible they might decide it was a criminal consipracy to evade tax between you and the customer.

Now if you can afford a good team of barristers and tax accountants and have lots of money you could fight this through the courts and its possible you might win. Its also quite possible you wouldnt win and might even end up in prison but at the very least you would face heavy fines and the likelyhood of getting a major VAT audit every year forever!

If by some miracle you did win the loophole would be closed one way or another before you could open the champagne.

In the final analysis if it was a workable and legal method then why isnt everyone using it?