Reply to: HMRC letter re flat-rate VAT scheme

[shazbot]

I managed to get some detailed help on the responses from QDOS Accounting (via a PM from someone senior who saw this thread), who have responded to very similar questions in recent months. It is all about FRS VAT as you'd expect, not IR35 related.

Very impressed with QDOS, considering I only have the insurance and am not an accounting customer of theirs! Of course the PM helped a lot, but clearly they know their stuff on this.

I will be sending responses via my accountant on Monday and will see what comes back.

[RonBW]

They are quite a large contractor specialist accountant, and like many accountants these days they seem to recommend FRS VAT if your turnover is under £150K (though I did have a choice).

In the first year of VAT registration, that might still make sense. If you fall into the new 16.5% VAT rate after that, then I would consider the logic of being on FRS - it depends on what you do and whether you can be bothered to do a full VAT return instead of FRS though.

[shazbot]

Just noticed the top bit. Firstly you want those questions answered on your behalf direct to HMRC I would bypass your accountant..

Secondly its strange that your accountant seems to have a few companies being checked yet other accountants on here have never heard of this issue. Personally it seems your accountant my be specialising in a particular part of the market you don't want to be associated with - it may be worth finding a different accountant.

They are quite a large contractor specialist accountant, and like many accountants these days they seem to recommend FRS VAT if your turnover is under £150K (though I did have a choice).

[eek]

Yes, accountant will reply to HMRC - they've sent me an email with these questions (inserting my company name) to which I will reply, so they can reply based on the various companies being checked.

Just noticed the top bit. Firstly you want those questions answered on your behalf direct to HMRC I would bypass your accountant..

Secondly its strange that your accountant seems to have a few companies being checked yet other accountants on here have never heard of this issue. Personally it seems your accountant my be specialising in a particular part of the market you don't want to be associated with - it may be worth finding a different accountant.

[shazbot]

I agree - the advice to answer these questions yourself is extremely poor advice IMO. Get an expert (QDOS/AbbeyTax) opinion. If you have IPSE+ or QDOS PEI, it should cover this.

I have QDOS TLC35 cover, which despite focus on IR35 does in fact cover any HMRC investigation including VAT, for up to £50K fees - phew! TLC35 details (For newbies like me, TLC35 essentially seems to include PEI = Professional Expenses Insurance i.e. covering accountancy/legal fees for any tax investigation.)

So I will call QDOS again to get them to take this seriously and write the answers for me. Only if that fails will I go the route of paying someone else directly for advice (AbbeyTax / WLH Tax etc).

[shazbot]

Thanks everyone for the responses! I am taking this seriously and will get professional advice, as various people recommended.

I will talk to QDOS, though I'm not sure they will help at this stage based on answers so far.

I am contacting a lawyer with contractor / IR35 experience (not sure about VAT), and a VAT investigation specialist, WLH tax, and will probably go with WLH:

• VAT Fraud, VAT Evasion, VAT Inspection, HMRC Public Notice 160 & VAT Investigation
• COP 9 - Good accountants or solicitors? - Tax Forum :: Free Tax Advice

I don't think this is IR35 related, but some of the answers overlap with IR35 questions, and a VAT investigation (if this turned into one) is bad enough.

[SueEllen]

You don't fancy putting a call in to my missus to that effect? [emoji3]

Nope cos she's right anyway.

[LondonManc]

Read the questions on the basis that they suspect the company has been created to employ a few care workers and you can see how the questions make sense....

I don't disagree with you - but I'm still not sure how many would be privy to the upper contract if via an agency.

[eek]

Unless she's seeking your tax advice, you're not going to get anyone convincing her to be anything other than your wife in marital discussions.


In terms of the topic at hand, the questions ask about the upper contract - that would be like someone asking a retailer if they could provide details of how much John Lewis pays for the stock that they buy.

Read the questions on the basis that they suspect the company has been created to employ a few care workers and you can see how the questions make sense....

[LondonManc]

You don't fancy putting a call in to my missus to that effect? [emoji3]

Unless she's seeking your tax advice, you're not going to get anyone convincing her to be anything other than your wife in marital discussions.


In terms of the topic at hand, the questions ask about the upper contract - that would be like someone asking a retailer if they could provide details of how much John Lewis pays for the stock that they buy.

[Alan @ BroomeAffinity]

@shazbot - This guy is an accountant so take his words very seriously.

You don't fancy putting a call in to my missus to that effect? [emoji3]

[MrMarkyMark]

Which is why I asked what the letter ACTUALLY said...

Pretty irrelevant, no?

Unless you think answering a series of questions from HMRCs Fraud Investigation Labour Providers Unit is optional in some way..?

Good luck!!!

[b r]

I certainly wouldn't advise taking that approach!!!

Which is why I asked what the letter ACTUALLY said...

[SueEllen]

There's nothing usual in this. I've been directly or indirectly involved in (I'd guess) more than 2k VAT registrations and I've never heard of this. Answer with extreme care and seek advice before doing so. Probably from your insurers.

@shazbot - This guy is an accountant so take his words very seriously.

[malvolio]

I think you need to have your English comprehension skills checked:

he does need those questions answered appropriately != answer the questions himself.....

So we're actually all agreed, from SueEllen's post onwards. That's good then.

I hope the OP takes Alan's post very seriously though.