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Autumn News
Quadruple Entry
A trader recently registered for VAT and did his own returns. He reasoned that his costs would go in a 12 month period of account for income tax, so he put the VAT on a big purchase - £6,902 - on all four VAT returns in his first 12 months. HMRC decided to investigate the same figure apparently being claimed four times. Surprisingly, he appealed to the Tribunal, arguing that this was how VAT ought to be done. He found that this was a minority opinion.People don't often get VAT accounting this wrong, but it is a reminder that HMRC expect hairdressers, newsagents, decorators and taxi drivers to account correctly for VAT, as well as lawyers and accountants. If you are not sure how to do it, we can help.