VAT

Some businesses, especially the smaller ones, regard the paying of VAT as something of an imposition and many will try to avoid paying it whenever possible. Take, for example, the self-employed plumber or electrician who quotes for a job but offers two prices. One with VAT and one “cash in hand”. The customer will often plump for the second price as it is obviously lower but both parties are, effectively, defrauding HMRC.

Severe penalties can be imposed on businesses who work in this way, if they get caught. It’s really not worth the risk and ignorance of the system is no excuse. It’s better to use the services of financial experts at Pros Assist to keep your affairs in order. The rules on VAT is just one of our many fields of expertise and it’s a good idea to take advantage of our knowledge no matter how tempting it might be to avoid paying it.

Not all companies are liable for VAT though. A private hire taxi firm, for example, can keep their fares lower by not adding VAT to the amount charged and this is perfectly legal provided their annual turnover does not exceed the thresholds set by HMRC. A full explanation of how all this works is on their website at http://www.hmrc.gov.uk/ and, of course, tax advisers at Pros Assist will be glad to guide you through the complex minefield of VAT rates, zero rated goods and services and exemptions from paying the tax altogether.

It’s really not the kind of tax issue that can be ignored or considered in a half-hearted way. Companies that fall foul of the VAT rules can be rigorously investigated and punished if they have been flouting the rules. This is clearly not something that a small business needs to be worrying about. It’s in your best interests to find out what your VAT liability is at the outset rather than leaving it until later on only to find that you have a huge bill outstanding.