THIS IS NOT A VAT RECIEPT

THIS IS NOT A VAT RECIEPT

Author
Discussion

Eric Mc

114,733 posts

229 months

Monday 1st March
quotequote all
"My understanding" means that you are making a bit of a guess and that there MAY be some wiggle room on what definitions matter.

Anything can be interpreted in varying ways once it reaches a court of law (or a VAT Tribunal).

In ordinary day to day usage, you are better off making sure you get valid VAT Invoices before making Input VAT claims.

You can't run your business making assumptions that someday you will find out at a VAT Tribunal (or worse) whether you did the right thing.

Sheepshanks

23,473 posts

83 months

Monday 1st March
quotequote all
plasticpig said:
SI said:

provided that where the Commissioners so direct, either generally or in relation to particular cases or classes of cases, a claimant shall hold, instead of the document or invoice (as the case may require) specified in sub-paragraph (a), (b), (c), (d), (e) or (f) above, such other documentary evidence of the charge to VAT as the Commissioners may direct.
The bit in bold applies to receipts which have “This is not a VAT receipt” printed on them.
Doesn't that require the Commissioners to so direct?

plasticpig

12,301 posts

189 months

Monday 1st March
quotequote all
Eric Mc said:
"My understanding" means that you are making a bit of a guess and that there MAY be some wiggle room on what definitions matter.

Anything can be interpreted in varying ways once it reaches a court of law (or a VAT Tribunal).

In ordinary day to day usage, you are better off making sure you get valid VAT Invoices before making Input VAT claims.

You can't run your business making assumptions that someday you will find out at a VAT Tribunal (or worse) whether you did the right thing.
Of course it's better to have a VAT invoice. In the real world that is not always possible though.

Evoluzione

5,717 posts

207 months

Monday 1st March
quotequote all
That would depend on the severity of the case, they're not going to fine you £250k and go to a tribunal for a handful of borderline low value receipts.

Eric Mc

114,733 posts

229 months

Monday 1st March
quotequote all
They might be more interested in the behaviour of the supplier, to be honest. If the supplier is deferring his liability to VAT by making excessive use of this technique, they might take an interest in his accounting and book-keeping practices - especially as to whether he is properly applying "Tax Point Date" regulations.

Tannedbaldhead

Original Poster:

2,714 posts

96 months

Tuesday 2nd March
quotequote all
Too many heads are in the wrong place here. They are concentrating way too hard on whether or not using these receipts is technically wrong which no-one really cares about.
For those who live in real life the far more important question is how likely are we to get caught out and if we do it how likely are wee able to sweet-talk our way out of this should HMRC ever notice?
My goal is to breeze through business relentlessly following the path of least resistance. Am certain that with a VAT number, supplier's address, proof of payment and delivery, the cost of goods and VAT paid all being available it has to be an incredibly pedantic tax inspector who is going to make anything of it. So confident am I in this position I'd quite happily stake our financial director's freedom on it.


Starfighter

3,744 posts

142 months

Tuesday 2nd March
quotequote all
caziques said:
In the good old days of handwritten petrol reciepts, the trick was to purchase nine pounds of petrol, and make it nineteen by adding a 1.
My old man always filled up on the way home where a friend’s mum worked. He had his own pad of blank receipts because company rules made him claim at an MPG rate he couldn’t get down to despite trying very hard.

Eric Mc

114,733 posts

229 months

Tuesday 2nd March
quotequote all
Tannedbaldhead said:
Too many heads are in the wrong place here. They are concentrating way too hard on whether or not using these receipts is technically wrong which no-one really cares about.
For those who live in real life the far more important question is how likely are we to get caught out and if we do it how likely are wee able to sweet-talk our way out of this should HMRC ever notice?
My goal is to breeze through business relentlessly following the path of least resistance. Am certain that with a VAT number, supplier's address, proof of payment and delivery, the cost of goods and VAT paid all being available it has to be an incredibly pedantic tax inspector who is going to make anything of it. So confident am I in this position I'd quite happily stake our financial director's freedom on it.
Who cares about the rules as long as you are not caught. That's the best approach to life - and business.

PF62

1,926 posts

137 months

Wednesday 3rd March
quotequote all
Tannedbaldhead said:
it has to be an incredibly pedantic tax inspector who is going to make anything of it
Have you ever met anyone from HMRC?

Sheepshanks

23,473 posts

83 months

Wednesday 3rd March
quotequote all
Tannedbaldhead said:
So confident am I in this position I'd quite happily stake our financial director's freedom on it.
You may find that if there's anything iffy about the VAT receipt then the company accounts people don't even try to claim it.

My experience is they tell you what they think you want to hear, then do whatever they think is right.

Red9zero

1,119 posts

21 months

Wednesday 3rd March
quotequote all
caziques said:
In the good old days of handwritten petrol reciepts, the trick was to purchase nine pounds of petrol, and make it nineteen by adding a 1.
My Father used to get pads of receipts from our local garage and then get me and my sister to fill them out for him at year end laugh

Tannedbaldhead

Original Poster:

2,714 posts

96 months

Wednesday 3rd March
quotequote all
PF62 said:
Tannedbaldhead said:
it has to be an incredibly pedantic tax inspector who is going to make anything of it
Have you ever met anyone from HMRC?
Worse experience was as a young freelance surveyor. I reckoned that as a QS doing my own tax and VAT returns would be easy.
Am not sure whether I was chosen at random or whether Customs and Excise felt that as I didn't use an accountant I was worth a look but regardless a VATman came to carry out an in depth audit of my books.
He found a few anomalies, mainly to do with what quarter I paid certain amounts on money based on me paying on the issuing and receiving of invoices rather than on my receipts and making of payments.
My "It all works out in the end" earned a very withering look followed by "what we are looking for is the payment of the right amount of tax AT THE RIGHT TIME". He wasn't impressed that I had claimed 100% of the VAT paid on my leased car and one or two other other issues. The guy was straight down the line and also showed me where I was making mistakes that were costing me money. He wasn't here as a money making exercise he assured me. The exercise was to ensure Customs and Excise were paid the "right amount of tax at the right time". He said that a lot throughout his visit.
At the end he informed me my returns were "not a bad effort.,,,,,, However" and at this point he took on a demeanour that scared the st out of me. "Not a bad effort is not good enough. It has to be spot on." Over a couple of years I was £200-£300 short. He then told me the amount of penalties and interest these errors would cost me. If I could remember the amount I'd tell you. All I can remember was feeling sick when he told me.
Then he said he saw no evidence of an attempt to defraud so would wave the penalties and take payment plus interest, advised I used an accountant to make ongoing returns and left with a cheque in his briefcase.

So, in answer to your question, I have met a taxman, found him honest, fair, able to judge whether or not I was "at it" and happy to exercise some personal discretion so as not to crucify me inspite of having the opportunity to do so.



Eric Mc

114,733 posts

229 months

Wednesday 3rd March
quotequote all
How long ago was that?

Tannedbaldhead

Original Poster:

2,714 posts

96 months

Thursday 4th March
quotequote all
Eric Mc said:
How long ago was that?
Late 1980s

NNH

1,139 posts

96 months

Thursday 4th March
quotequote all
2 sMoKiN bArReLs said:
Eric and I have 100 years accountancy experience between us, so OP is getting decent advice for free. smile


I remember the documentary smile

Eric Mc

114,733 posts

229 months

Thursday 4th March
quotequote all
Tannedbaldhead said:
Eric Mc said:
How long ago was that?
Late 1980s
Makes sense.

HMRC don't carry out these types of checks any more. It's about ten years since any of my clients had a visit from a VAT Inspector. The old style compliance visit is now more or less abolished.

plasticpig

12,301 posts

189 months

Thursday 4th March
quotequote all
Tannedbaldhead said:
Worse experience was as a young freelance surveyor. I reckoned that as a QS doing my own tax and VAT returns would be easy.
Am not sure whether I was chosen at random or whether Customs and Excise felt that as I didn't use an accountant I was worth a look but regardless a VATman came to carry out an in depth audit of my books.
He found a few anomalies, mainly to do with what quarter I paid certain amounts on money based on me paying on the issuing and receiving of invoices rather than on my receipts and making of payments.
My "It all works out in the end" earned a very withering look followed by "what we are looking for is the payment of the right amount of tax AT THE RIGHT TIME". He wasn't impressed that I had claimed 100% of the VAT paid on my leased car and one or two other other issues. The guy was straight down the line and also showed me where I was making mistakes that were costing me money. He wasn't here as a money making exercise he assured me. The exercise was to ensure Customs and Excise were paid the "right amount of tax at the right time". He said that a lot throughout his visit.
At the end he informed me my returns were "not a bad effort.,,,,,, However" and at this point he took on a demeanour that scared the st out of me. "Not a bad effort is not good enough. It has to be spot on." Over a couple of years I was £200-£300 short. He then told me the amount of penalties and interest these errors would cost me. If I could remember the amount I'd tell you. All I can remember was feeling sick when he told me.
Then he said he saw no evidence of an attempt to defraud so would wave the penalties and take payment plus interest, advised I used an accountant to make ongoing returns and left with a cheque in his briefcase.

So, in answer to your question, I have met a taxman, found him honest, fair, able to judge whether or not I was "at it" and happy to exercise some personal discretion so as not to crucify me inspite of having the opportunity to do so.
Last time I met a VAT inspector it was someone who had previously worked in the accounts department of a company who's MD was convicted of fraud to tune of over £100 million and caused the collapse of company.



Countdown

30,245 posts

160 months

Thursday 4th March
quotequote all
Eric Mc said:
Tannedbaldhead said:
Eric Mc said:
How long ago was that?
Late 1980s
Makes sense.

HMRC don't carry out these types of checks any more. It's about ten years since any of my clients had a visit from a VAT Inspector. The old style compliance visit is now more or less abolished.
With MTD I think there would be literally no point now.

Tannedbaldhead

Original Poster:

2,714 posts

96 months

Thursday 4th March
quotequote all
Eric Mc said:
Tannedbaldhead said:
Eric Mc said:
How long ago was that?
Late 1980s
Makes sense.

HMRC don't carry out these types of checks any more. It's about ten years since any of my clients had a visit from a VAT Inspector. The old style compliance visit is now more or less abolished.
More's the pity. I looked upon my visits from Customs and Excise and HMRC as a very worthwhile experiences. They taught me how tax collectors think and what they are after from the tax payer, set me up for better returns in the future and with the inevitable £200-£300 cheque in their briefcase (usually a relief as I was often liable for, waved, penalties for multiples of these sums) the cost of the VATman's afternoon's work was covered.
Often the old ways were the good ways. The best aspect of these visits was sitting face to face over a desk nose buried in the books of original entry the auditors could developed a 6th sense as to who was a crook and were worth the watching, who was a shambles in need of some serious words of advice and who were the good guys.
On top of that I also found them pleasant and very helpful.

Eric Mc

114,733 posts

229 months

Thursday 4th March
quotequote all
Countdown said:
With MTD I think there would be literally no point now.
I'm sure that is the idea behind MTD.

But it means they have had over 20 years of very little checking and as a result there will have been massive non-compliance. I am sure the country has lost billions through HMRC not doing its job properly.

The whole point of MTD is that, eventually, each VAT trader will be downloading their entire book-keeping contents to HMRC and HMRC will use (so they say) sophisticated algorithms to do the checking once carried out by experienced human VAT Inspectors.

I'm still not convinced it will work quite how HMRC expects.