What VAT rate do we apply to a hamper? Q. We trade as a food and drinks wholesaler. With Christmas approaching, we will be selling a hamper that includes a range of food and drink items, including tins of luxury fruit, jams, cakes, wine and chocolates. Our plan is to sell each hamper for £49.99...

You are in the process of leasing a property to a tenant who will use the ground floor for her retail business and the upper floor as living accommodation. Could opting to tax the property save you VAT? Supplies of property, e.g., letting, are normally exempt from VAT but opting to tax the property changes...

You need some building work done at your office, but your preferred supplier is not registered for VAT. This means that it will not be able to reclaim input tax on materials, increasing the final bill to your business. Is there a solution? Bob Johnstone takes a closer look. Frozen VAT threshold Even though the...

You are downsizing your office and have asked a few staff to permanently change to homeworking. You’ll pay them a one-off allowance towards the cost of setting up their home workspace. Can you reclaim the VAT they incur? VAT expert John Craig provides the answers. People often suggest that “putting it through the business” will...

A regular customer owes you a lot of money and has offered to pay half now if you agree to accept it as full payment for all outstanding invoices. But how do you deal with the bad debt? Our VAT expert John Craig explains in greater detail. The VAT rules are different according to whether...

REVERSE CHARGE FOR BUILDERS Q. I am a builder, and my cash flow has been badly hit by the new reverse charge rules. This is largely because I am no longer being paid VAT by my builder clients to use as working capital until my quarterly VAT return is due. Is it possible to issue...

Expenses for travel to temporary workplaces Q. In April 2020 we furloughed an employee who since June 2019 had been temporarily working away from her normal workplace. She is about to return to work at the temporary location and is expected to be there for the next six months at least. We have always paid...

If you deferred VAT payments due between 20 March 2020 and 30 June 2020 and still have payments to make, you have three options: • Pay the deferred VAT in full, on or before 31 March 2021 • join the VAT deferral new payment scheme – the online service is open between 23 February 2021...

New VAT rules for construction In this attached guide we look at the ‘Domestic Reverse Charge’ (DRC) that applies for VAT on construction services from 1 March 2021. This was announced in a consultation in early 2018, with the intention that it should be introduced on 1 October 2019. It was delayed for a year...

The United Kingdom officially left the European Union (EU) on 31 January 2020 and the 11-month transitional period ended on 1 January 2021. There are important changes businesses must now make in order to continue trading with the EU. VAT changes The UK left the EU VAT Territory on 31 December 2020. Following this date,...