Reply to: VAT DD

[Notascooby]

I just had a funny thing happen - looked at my business account and noticed a significant DD for VAT had come out, then a fews days later I couldn't log into my Cater Allen account, just phoned up and got my access back, my access was revoked but operator wan't sure why - then noticed that the big withdrawl had disappeared.

Anyone else get a phantom amount taken and then replaced?

Should I call the bank to workout WTF happened or was I just tripping?

[Wanderer]

I never look at my business bank account balance and think 'that's the amount of money I have'... it's dangerous.
Much better to use your accountant's P&L and/or a spreadsheet with all your invoices and taxes etc etc.

Agree 100%. The company's balance sheet shows how much is available to take as dividends at any given time and that's what matters to me as a director and shareholder. The amount of cash at hand set aside in the bank for paying CT/VAT is of little importance so long as the transactions are properly accounted for and the bank balance matches my company balance sheet.

Personally, I don't do the DD VAT - I just schedule a payment when I do the VAT return. It only takes a few minutes.

[Scrag Meister]

That's a cracking rate you're on then!

Or could be that I am working my arse off on a couple of mediocre bob rate contracts and have no life?

Contracting 101 - Never discuss your rate or any true figures that enable someone to derive your rate.

[kingcook]

I've never fancied the idea of HMRC being able to take money directly from my bank account. The BN66 farce shows how little they they can be trusted and a recent experience over my VAT returns shows them to be pretty incompetent.

+1

I don't like DD's in general, and only do it if (with my personal accounts) there's some financial incentive (e.g. £x discount per mth/yr)

[JamJarST]

Yeh. Agreed. Only time I look at business account it to make sure agency has paid me. Balance is irrelevant - P&L is the relevant bit as it profit available for dividend.

Rubbish!! IMHO of course .... both are important, I would not personally declare a dividend in excess of what is in the back even though technically you can.

[psychocandy]

I never look at my business bank account balance and think 'that's the amount of money I have'... it's dangerous.

Much better to use your accountant's P&L and/or a spreadsheet with all your invoices and taxes etc etc.

Yeh. Agreed. Only time I look at business account it to make sure agency has paid me. Balance is irrelevant - P&L is the relevant bit as it profit available for dividend.

[stek]

Anyone know why the HMRC don't take the VAT DD's until 6 weeks after the end of the quarter to which it pertains?

I would really like it if they took it as soon as I submit my return, rather than having 10k of their money in my account for a month and a half.

That's a cracking rate you're on then!

[Clare@InTouch]

I've never fancied the idea of HMRC being able to take money directly from my bank account. The BN66 farce shows how little they they can be trusted and a recent experience over my VAT returns shows them to be pretty incompetent.

I can understand why you have little faith, but keep in mind that even HMRC DDs are covered by the DD guarantee - if they take something and you disagree, you can get it back. You can also cancel the DD at any time. The power is still in your hands, it just makes known liabilities easier to pay.

[javadude]

I've never fancied the idea of HMRC being able to take money directly from my bank account. The BN66 farce shows how little they they can be trusted and a recent experience over my VAT returns shows them to be pretty incompetent.

[MrRobin]

I never look at my business bank account balance and think 'that's the amount of money I have'... it's dangerous.

Much better to use your accountant's P&L and/or a spreadsheet with all your invoices and taxes etc etc.

[Scrag Meister]

I still don't see the problem here, I sweep the excess funds in my current account into my business saver account. The spreadsheet I have from SJD automatically calculates the VAT and Corp tax liabilities and I have a bank spreadsheet with columns for these amounts which tells me my available monies at a glance. The only thing I have to do is make sure I transfer the money back to the current account the day before the DD and how difficult is that? The savings account may not be making £100's in interest a month but it is making more than 50p!! All helped by having the highest possible balance I can.

Sure, just a slightly different strategy, in that I transfer it back as part of my quarterly VAT process, and it sits there in my main account awaiting the DD request.

[JamJarST]

Nothing like the good old days a few years back where I'd be making just shy of £100 per month on interest, now it's like £0.50 or something equally stupid. And having the VAT money in my account is no use on the interest front it just blurs my view of the account when I look at the balance.

I still don't see the problem here, I sweep the excess funds in my current account into my business saver account. The spreadsheet I have from SJD automatically calculates the VAT and Corp tax liabilities and I have a bank spreadsheet with columns for these amounts which tells me my available monies at a glance. The only thing I have to do is make sure I transfer the money back to the current account the day before the DD and how difficult is that? The savings account may not be making £100's in interest a month but it is making more than 50p!! All helped by having the highest possible balance I can.

[Scrag Meister]

Why? It cases you no harm and you do earn a little bit of money on it don't you?

Nothing like the good old days a few years back where I'd be making just shy of £100 per month on interest, now it's like £0.50 or something equally stupid. And having the VAT money in my account is no use on the interest front it just blurs my view of the account when I look at the balance.

You could cancel the DD and pay by transfer, that way you could do it as soon as you wanted to.

Am considering this already, I like DD as a process, its just the long delay in taking it.

[JamJarST]

Anyone know why the HMRC don't take the VAT DD's until 6 weeks after the end of the quarter to which it pertains?

I would really like it if they took it as soon as I submit my return, rather than having 10k of their money in my account for a month and a half.

Why? It cases you no harm and you do earn a little bit of money on it don't you?

[Clare@InTouch]

You could cancel the DD and pay by transfer, that way you could do it as soon as you wanted to.