Help needed - VAT due

Paige

My accounts are in pretty good shape and I am always honest, I dont put through dodgy receipts ect that I know some of my clients do.
The reason that I dread a VAT inspection is not because of my accounting funnily enough. I was inspected about 6 years ago by a sleezy old guy who has since retired.
He was very rude and wanted to look upstairs in my bedrooms, I have a downstairs office and had all my paperwork ready for him, he found a slight error and I had to repay £200. I refused to allow him upstairs and when he had left I contacted my accountant who suggest that I complain to the Inland Revenue which I did. The Inland Revenue were very helpful and surprised, I did receive a letter saying that the man in question had a bad leg and needed to move about a lot. But no further action was taken as he had retired just 1 week after the inspection.
I am now on a flat rate for VAT but next time I get a visit I will ensure I have someone in the house with me. Paige X

Richard_S

pusscat wrote:

HMRC are the last people you want to mess around.

However, this must be a one off as VAT is only collected from monies already recieved by you, so in theory you are using HMRC's money to fund your business.

Puss

Hi Puss,

It's the timimg that's causing Paige problems, she hasn't received the money, she's raised invoices and not been paid. It does seem as though she's maybe using an unsuitable scheme but without knowing the business it's difficult to make a constructive comment.

In my experience HMCE are really helpful, one of the inspectors we dealt with advised us on what was then a new scheme, that would actually mean we were paying less in VAT even though the system we were using was calculating VAT accurately.

Richard

silvercar

I would reckon that paying late will cause you the least agro. At long as you are sure you will have the money to pay on the 10th. worst case - a snotty letter and 6 days interest.

Richard_S

Paige wrote:

My accounts are in pretty good shape and I am always honest, I dont put through dodgy receipts ect that I know some of my clients do.
The reason that I dread a VAT inspection is not because of my accounting funnily enough. I was inspected about 6 years ago by a sleezy old guy who has since retired.
He was very rude and wanted to look upstairs in my bedrooms, I have a downstairs office and had all my paperwork ready for him, he found a slight error and I had to repay £200. I refused to allow him upstairs and when he had left I contacted my accountant who suggest that I complain to the Inland Revenue which I did. The Inland Revenue were very helpful and surprised, I did receive a letter saying that the man in question had a bad leg and needed to move about a lot. But no further action was taken as he had retired just 1 week after the inspection.
I am now on a flat rate for VAT but next time I get a visit I will ensure I have someone in the house with me. Paige X

Oh Dear,

Not surprised you're dubious about another visit Paige.

One of our inspections (we had a large convenience store at the time) was conducted by a young woman in her early twenties who was obviously very keen to make an impression and the girls in the store christened her the "Ice Maiden" because of her frosty approach to everybody.

The point being, we lived close to the store and she insisted on examining our house to confirm that there was no "bootleg" booze or cigarettes. There wasn't, but when she saw our pooches she was the one who said we could reclaim VAT on dog food cos they were acting as guard dogs. I would guess that examining domestic premises is part of their remit.

Richard

Paige

I am beginning to think along your lines silvercar. I will have the money by the 10th and work out I will have to pay about £85 surcharge according to the info on the link above. Thanks Paige X

Richard_S

silvercar wrote:

I would reckon that paying late will cause you the least agro. At long as you are sure you will have the money to pay on the 10th. worst case - a snotty letter and 6 days interest.

The problem with paying late is that it's flagged on their system and will trigger an inspection if it happens regularly and Paige has already had one late payment. Their approach to businesses who are late paying because of cash flow issues is to contact their bank and that HMCE is not in the banking business.

Richard

pusscat

Sorry my fault - I misunderstood (or misread) the origional post!

Agree that HMRC are generally helpful - but they are still the last people that you want to mess around, the powers that they have are immense and they do not like "calcualted mistakes". For genuine mistakes they are helpful.

Sorry Paige!

Puss

Epiphone

Rule 1: DO NOT EVER fvck with the VAT man. This means no "errors", sending a letter and forgetting to include the cheque etc.
Rule 2: If in doubt, see Rule 1.

If you have an accountant speak to them for advise. If you don't, speak to the VAT man and explain the situation.

myrnahaz

The VAT people are usually really good if you ring and explain what's happening. I've had to do this at times and they've asked for a date when I'd be likely to pay and (as long as it's only a week or so) they've said OK. Make sure you ring the local office rather than the helpline.
If your turnover isn't huge, you could use the cash accounting method - where you don't pay (or claim) the vat until your customers have paid you (you can't claim until you've paid your suppliers, but it can be a useful trade-off). Ask your vat office about cash accounting (it should be explained on the HMRC website)

Paige

Thanks to everyone who replied to my question. A MIRICLE has occured. My Mum asked me yesterday if she could order £1700.00 worth of dollars on my M&S card (this is a 0 per cent card with a zero balance on it) as she will not have to pay any delivery or any comission on it - a perk of the card. She has given me the cheque so I can use that to pay my VAT bill and when I receive my company invoices I can pay the M&S card off in full. This will only cost me a small amount of interest - approx 2 weeks of interest for a cash transaction. Horray !!! Paige X