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Tax Tribunals : VAT Flat Rate Scheme and Bank Interest

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    #21
    Originally posted by Bumfluff View Post
    So is it safe to try and claim back VAT payments on bank interest or is the jury still out and we should wait and see ?

    Thanks
    The Flufster
    I think the fact HMRC had 56 days from the 11th Jan to appeal and haven't done so gives a good answer.
    Also PCG have released a news letter around this. Speaking to the revenue the Thexton Training Ltd case can be relied upon.
    http://uk.linkedin.com/pub/dan-moss/18/18/105

    Comment


      #22
      Just as an update to this thread as the HMRC guidance is still insisting bank interest be included, the following article talks about how the Chartered Institute of Taxation have written to HMRC to request they update their guidance:

      CIOT Challenges HMRC on VAT Flat Rate Scheme and Bank Interest | Business Tax | Tax News
      ContractorUK Best Forum Adviser 2013

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        #23
        You could always make adjustment if you put it wrong on the VAT Return

        From what we talked to the VAT inspector, we feel that HMRC does not always give a clear guideline to them. So, someone we can get different answer from different officers.

        Comment


          #24
          Originally posted by Tanya@SC Lee Accountant Ltd View Post
          You could always make adjustment if you put it wrong on the VAT Return

          From what we talked to the VAT inspector, we feel that HMRC does not always give a clear guideline to them. So, someone we can get different answer from different officers.
          I assume that English is not your first language!
          "The budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed lest Rome become bankrupt. People must again learn to work, instead of living on public assistance." Cicero

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            #25
            Over the 4 years I have been contracting I have earned interest of £810.

            So Vat paid is (ignoring recent changes) £105.30 at 13%.
            CT on this refunded value is £22.11
            Therefore total refund is approx £83.19.

            Not a mega deal, but a matter of principal I feel.
            Never has a man been heard to say on his death bed that he wishes he'd spent more time in the office.

            Comment


              #26
              Originally posted by Scrag Meister View Post
              Therefore total refund is approx £83.19.

              Not a mega deal, but a matter of principal I feel.
              Add up all that £83.19 for all the thousands of small businesses and sole traders on the flat rate scheme and it could end up as a lot of money for HMRC.

              Hence they are keeping quiet......

              I wonder if all the small business/freelancer banded together would they do something?
              "You’re just a bad memory who doesn’t know when to go away" JR

              Comment


                #27
                HMRC have seemingly updated their guidance on the flat rate scheme:

                Don't include:
                • services you've purchased from outside the UK that you've had to reverse charge
                • disbursements - costs you pass on to your clients that meet the necessary VAT conditions
                • private income, for example income from shares
                • bank interest received on a business account
                • the proceeds from the sale of goods you own but which have not been used in your business
                • any sales of gold that are covered by the VAT Act, Section 55 - see the link below
                • non-business income and any supplies outside the scope of UK VAT
                • sales of capital expenditure goods on which you have claimed back the VAT you paid


                HM Revenue & Customs: Flat Rate Scheme for VAT

                Although it's worth noting that Notice 733, last updated in April 2011, still states that you should include it.

                Nothing like a bit of consistency!
                ContractorUK Best Forum Adviser 2013

                Comment


                  #28
                  riiiiiiiiiiiiight then - I'm claiming back (or rather deducting from my next payment) the £67.31 I paid or whatever it is ...boooooooomed

                  Thanks for keeping us updated - I'll toast you as I'm spending on beers this weekend.

                  Comment


                    #29
                    Originally posted by Clare@InTouch View Post
                    Although it's worth noting that Notice 733, last updated in April 2011, still states that you should include it.

                    Nothing like a bit of consistency!
                    Interesting update, thanks.

                    So are you saying that this is only valid from now or can we make a retrospective claim?
                    Never has a man been heard to say on his death bed that he wishes he'd spent more time in the office.

                    Comment


                      #30
                      HMRC Notice 733 has now been updated, so it is now definitely correct to exclude bank interest from flat rate turnover.

                      ...
                      1.2 What has changed?
                      This revised notice replaces the April 2011 edition. The amendments reflect the withdrawal of the need to include bank interest in the flat rate turnover.
                      ...

                      ...
                      6.3 What income do I exclude from my flat rate turnover?
                      You exclude from your flat rate turnover:

                      ■private income, for example income from shares
                      bank interest
                      ■the proceeds from the sale of goods you own but which have not been used in your business
                      ■any sales of gold that are covered by the VAT Act, Section 55 - see Notice 701/21 Gold
                      ■non-business income and any supplies outside the scope of UK VAT, and
                      ■sales of capital expenditure goods on which you have claimed input tax.
                      ...

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