Reply to: VAT investigation - Help!! CONFUSED

[namsey]

one thing i forgot to mention, the HMRC inspector that came out last time was based locally and he was an absolute **** He was very arrogant, he never once smiled. One machine takes up nearly 2000sq ft and we have 3 of those. He saw all the paper work, our bank statements, every penny was accounted for, it matched the bank statements, except for £214.73, we transferred the money from our account to the finance company, it shows the company name on my bank statement and our company name on the agreement and at the end of it all he wanted to know how how much we paid, when we paid it HE'S JUST SEEN ALL THE PAPER WORK SO WHY WAS HE ASKING ME?????

I couldn't tell him exact dates & amounts as he had all the paperwork. He said I should know the exact figures as they are large amounts? Should I? I've done nothing wrong, but he made me feel like I did.

He sat there with his calculator working things out and we had £214.73 more incoming than what was shown on my invoices and he wanted to know where that money came from? Really? It's £200 quid, I borrowed £500 from my brother as we were a bit short that month on the out goings, he wanted paperwork to prove I borrowed the money?? OMG I rung my brother infront of him and asked him, he confirmed it but he still wanted something in writing confirming he had loaned our company the money interest free. I posted it out first class recorded the same day!

I know it's a large amount we're reclaiming but the only reason I'm dreading another investigation is because he made me feel like an idiot. Unfortunatley we've had back luck with the machines and he saw the bits that were broken of it when he was there and it wasn't working.

I DON'T WANT TO GO THROUGH THAT AGAIN. I just hope they ring the finance company to confirm things and I don't have to deal with him. The agents on the end of the phone are very helpful, HE WASN'T.

All we're trying to do is manufacture a product in the UK, generate more jobs locally, I've got 2 apprentices starting in 2 weeks but I need this mess sorting out before then.

[namsey]

There is a page with a full breakdown of how much the machine are costing, what the interest charges are, how much deposit is paid, how much the Vat is. I have wrote to them asking for the Vat invoice, I'm just waiting for an answer.


The HMRC office did accept the finance agreement last time as it has the breakdown on it, I'll try and and get a vat invoice our of the financce company, if not I'll tell them the agreement was accepted last time, can they not do the same.

I've found the Vat helpline very helpful, I ring them for advice and they're resolved my queries. I'm just worried about the amount I'm giong to claim again through no fault of my own, unfortunately we haven't had much luck the machinery so we're having to upgrade or close down. We've put too much money & effort into the business to close it down because they supplied us with a 'so called refurbished machine' 2 independant engineers said the machine should have been broken down & the parts used, not sold!!!!

We were assured after refubishment the machine would be 'like new' but they just cleaned it with an air machine, not parts replaced. We could have got the same machine from a local company, same price but in full working order, now we're paying 3 times the price of what we wanted to pay but we don't have a choice at the moment, it either shut down or accept their offer which is what we did.

I'll keep you posted as to what happens, I'm waiting for HMRC to contact me & arrange an appointment or request the papers.

[craig1]

The VAT people are about the most helpful government employees I've dealt with as long as you're open and honest with them. I do my own accounts and if I run into something I'm not sure about I call the VAT helpline and always get excellent advice along with an HMRC reference number that tracks the advice they gave me. Last time I had an audit was when I took a good bit of time off and had a quarter with no income but still some outgoings compared to my normal healthy quarterly VAT return, the inspector went through my books for the previous year, checked my contracts and bank statements then we spent a bit of time discussing where I could claim some more stuff back.

The people who seem to get the nasty audits are those who think it's a good idea to be difficult or try to manipulate HMRC inspectors, that's when the rubber gloves come out. Yes, there are going to be arsehole inspectors out there but would it really hurt to be open and honest with them, they're going to get to the truth anyway so why annoy them enough that they decide that it's deliberate evasion rather than accidental.

[SarahL2012]

I called them today and again I got the same answer, we can use the finance agreement as that shows the vat, we don't need a Vat invoice. I was told that HMRC can contact them if they need to and they will confirm both agreements and explain.

Is there a page somewhere in the finance agreement that has all of the numbers on it? If it shows a breakdown of the costs and the VAT, together with the Finance companies VAT number (which could be elsewhere in the document) then that should suffice.

[Alan @ BroomeAffinity]

Did you buy the asset from the finance company? Often, the VAT invoice needs to come from the supplier of the goods. Might be worth talking to them.

[Wanderer]

I called them today and again I got the same answer, we can use the finance agreement as that shows the vat, we don't need a Vat invoice. I was told that HMRC can contact them if they need to and they will confirm both agreements and explain.

Read that link I gave you. It may be that the finance agreement constitutes a VAT invoice, read it and see if it has all the required details?

If you don't have a VAT invoice then you can't claim the VAT back so get it right especially as there is a lot of cash at stake here.

[namsey]

I called them today and again I got the same answer, we can use the finance agreement as that shows the vat, we don't need a Vat invoice. I was told that HMRC can contact them if they need to and they will confirm both agreements and explain.

I'm going to write to them and request it in writing.

This is one of the biggest finance companies in the UK and they were passed my details by my bank when I went to open the bank account, and they're being a pain.

[Wanderer]

The finance company were a bit reluctant to email/post me the Vat invoice, they said the finance agreement shows everything and that should be sufficient.

No it's not sufficient.

According to HMRC, "If you are registered for VAT, then whenever you supply goods or services to someone else who is also registered for VAT you must give them a VAT invoice."

Tell them to stop messing you around..

[SueEllen]

I told her I need both invoices, one for the last lot and one for now, they don't want to give it to me????? I wonder why???? Any comments or thoughts on this would be helpful

Hmm, being such a big asset finance company, you would think, they would happy to give me a Vat invoice as I have paid the VAT??

Send them a letter preferably by recorded signed for delivery asking for the VAT invoices.

And keep a copy of everything including the receipt in your files.

The reason they don't want to give you the invoice is because it's more paperwork hassle for them so formally ask for it.

[namsey]

Thanks for all the helpful info and 'other' comment.

I've spoken to a recommended accountant and I am going to see him next week to sort this mess out. I think I'll leave everything to them as it's a bit too much for me.

Just one more question, will HMRC contact the supplier of the machines & finance company? If they do, it's all straight forward and I don't have to worry about anything as they can explain this mess to HMRC direct.

I didn't think to ask for a Vat invoice, Duh!!!! The accountant said as long as I have a Vat invoice I'm fine along with all the bank statement showing the direct transfer. The finance company were a bit reluctant to email/post me the Vat invoice, they said the finance agreement shows everything and that should be sufficient. If I need a Vat invoice, I have to put it in writing???? I told her I need both invoices, one for the last lot and one for now, they don't want to give it to me????? I wonder why???? Any comments or thoughts on this would be helpful

Hmm, being such a big asset finance company, you would think, they would happy to give me a Vat invoice as I have paid the VAT??

[Alan @ BroomeAffinity]

NLUK always makes some valid points. Maybe "ask your accountant" or "do a search" is a bit curt but its often what people need to be told. The easy thing is to ask for info on a forum - the hard thing is to run a business. In the long run, you need to know this stuff.

[Wanderer]

a, will the vat man come knocking again?
b, will I have to go through the same palava again? 6 HOURS LAST TIME!!!

You started up a business and then claimed £22k in VAT back on your first return. Can you honestly not understand why HMRC would want to investigate that?

As you have done nothing wrong, there is nothing to be afraid of. Be careful with this amount of money though, if you make a mistake then it could be very costly. You have come to the correct conclusion though - you will have to delegate things so engage an accountant and/or book keeper to deal with this stuff so you can get on with running your business!

Good luck!

[northernladuk]

As long as only people who have actually experienced the problem post rather than those who think they know it all. I bet you know who I am thinking of.

From someone who puts so little in to the forum you do a lot of moaning. It's a free and open forum, people say useful stuff, people make mistakes... oh yeah and there are those that do f all but moan of course.

You don't like my posts, I get that, I make the odd mistake that you like to fly like a flag, I can kinda get that. To ignore that the fact that inbetween all the crap I post sometimes it is useful, even if it is a link to a search just makes you look like an idiot.

... all from the guy that couldn't even put a post in the right forum today as well....

We have an ignore button, use it if it bothers you that much.

[escapeUK]

Any chance we can start a sticky or subforum in welcome where we can post examples of what can happen if you don't bother running your affairs properly so other newbies can take heed of what happens if they CBA to run their business like a business?

As long as only people who have actually experienced the problem post rather than those who think they know it all. I bet you know who I am thinking of.

[xoggoth]

Most companies get a VAT inspection when they start going, no reason you should get another unlesd you do something major wrong.