TOP 5 VAT MISTAKES (UK)

VAT is complex, but we see a pattern of common mistakes. In this video Dan runs you through the common ones so you can avoid costly mistakes.
Topics include:
Does insurance have VAT on
Do train tickets have VAT on
Do I claim VAT on wages
Do I need a receipt to claim VAT
Is the VAT flat rate scheme a good idea
What are the main VAT codes
What is zero rate VAT code
What is reduced rate VAT
How the VAT flat rate scheme works
..... and more!
You can see more about what we get up to on the following:
LinkedIn (Dan): / danheelan
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Podcast: heelanhub.co.uk The HeelanHub Podcast, a show for small business owners.
Join our mailing list for tax tips at: www.heelanassociates.co.uk
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Web: www.heelanassociates.co.uk
Call: 02392 240040 Email: [e-mail]
#selfemployed​ #VAT​ #HMRC

[@mirjanatrifkovic4984]

Great educational video AGAIN, thanks for all your work, PS if you have any courses, please do let me know, very much interested. Much appreciated all your advice, simple yet very effective and they do have a great deal of effect on "OUR" work

[@HeelanAssociates]

Glad to hear they help! No courses currently all of our support, advice and training is currently given to our clients through our accountancy business.

[@matthewcharles1688]

Fantastic video! I was hoping you can help me out - we're selling clothing on behalf of a client and a new business so its very difficult to gauge revenue. I'm thinking of registering for VAT as we start because I don't want to hit the VAT threshold and be hit with a heft bill (this would also be difficult to work out how to pay as our client would be expected to pay a portion also). My question is, when you hit the threshold, do you have to pay VAT on the previous 12 months? Or does it start from then on?

[@HeelanAssociates]

This may help DO YOU HAVE TO ACCOUNT FOR VAT ON EVERYTHING BEFORE REGISTRATION? (Q&A) kzbin.info/www/bejne/q2mWp5hoZ7Wfra8 But it’s only forward looking if you registered on time.

[@Mrhaydentv]

Hi I have a question regarding floating vat? I sell bundles and hampers and some of my products are 0% items in the entire bundle or hamper, but occasionally the box may be £1.15. Is this still 0% classed as, or do you need to class the entire bundle as 20% because of this one item? As far as I was aware, you can class the bundle as 0% as long as the box is worth less than £1, how ever I them found out about floating vat, which means if a box or packaging is essential (like mine) then it is classed as floating vat and the entire bundle even if the box is over £1 I can class this as a 0% item? Thanks!

[@HeelanAssociates]

Sorry we missed this. Some good guidance here www.gov.uk/hmrc-internal-manuals/vat-valuation/vatval03000

[@meharking1]

❤ thanks for helping

[@HeelanAssociates]

Glad it helped!

[@oibab1475]

Great video. Going back to point 2; If a VAT registered re-seller, purchased items from a non-VAT reg supplier, to re-sell on Amazon, what is the correct VAT calculation for this transaction? Would the VAT registered re-seller simply have to pay 20% on the sale price (as there is no VAT to reclaim off of the purchase)?

[@HeelanAssociates]

In short, if I’ve understood correctly then yes. Re seller of vat registered likely need to charge vat. Whether they paid any vat on the product they bought won’t change whether vat is charged onward. Hope that helps.

[@Man-xj3zu]

Please do video on VAT on takeaway business. Also please best software to use for an amateur person , just for self use . Thanks

[@HeelanAssociates]

What sort of info would you like in a video on vat on takeaway business? For amateur use, Xero.

[@Enigmo1]

Say a business buys a fixed asset for £4500 and paid £750 in VAT for that, how does that VAT be reclaimed? Is it reclaimed in one go like usual expense or does being fixed asset change that?

[@HeelanAssociates]

Usual, on the return (presuming you aren’t on a special vat scheme).

[@ilkbaharkunduzu1]

When I establish a new company to sell handmade good on amazon, amazon takes vat but NOT on my behalf. We should handle VAT. My question is the product I sell ii not in UK at point of sale so I will send from non EU country Turkey, after every order because the products are all custom. I will declare the invoice that I have taken VAT and my VAT registration number etc on the package. However, will there be any other custom duty by HMRC? Thanks

[@HeelanAssociates]

Sorry it’s a hard one to answer in a comment as much depends on place of supply, and also potential customs duties.

[@olimpiu-suciu]

what if my company is vat registered and have mixed vat incoices and non vat invoices, not all work providers paid vat my services? thank you

[@HeelanAssociates]

It can be possible you provide some services that don’t have vat charged on them and some that do. Depending why that is *might* impact the amount of vat you can recover, but equally might not - just depends on situation (sorry hard to explain in a comment here)

[@ruancardeal1574]

Hi. Can you answer me a question? I am a self employed ( driver ). Can I save some money if I register myself to VAT and start charging (20%) the company I work for? If i register, I still have to send the tax return every year and the VAT return each 3 months, or just VAT return.. ( sorry about my english, not so good yet )

[@HeelanAssociates]

You'd have to charge VAT to the company and the public, so its rare to see drivers VAT registered as it causes pricing issues for them. If you did, usually 4 VAT returns and a self assessment tax return annually.

[@dkctransport8170]

ruan let me answer this i was a hgv driver with my own ltd company. you do not need to worry about adding vat to the price as the company you are charging will reclaim the vat element back. heres what i suggest as a driver in the industry, enroll yourself on the fixed rate scheme (vat fixed rate scheme) and you will liable to pay a lower percentage of vat against your company (or soletrader) amount that is due. The first year 'transport by road' SIC category is 11% and then it moves upto 12% (listen to the guy in the video he explains how they take the % from your turnover) the reason why the government brought in the fixed rate scheme was to eliminate the 'admin' required to analyze all the receipts and paperwork required to make sure the vat was correctly calculated. you will make a few quid out of the process and benefit from it, it is totally legal and you are doing nothing wrong.

[@oman9492]

I think transportation services like taxi drivers are exempt from VAT in the UK. To charge an extra 20percent and lose 20percent immediately in tax would only benefit the tax man.

[@Jack-oz3ig]

I have recently ordered 500 units of a diary that I have published from china. They did not charge me VAT. I am selling them on amazon, Do I still owe HMRC VAT for buying these 500 units? I am struggling to understand if the company charges me the VAT, or if I have to contact the HMRC myself and tell them of my transaction and pay any VAT that I owe on this order.

[@HeelanAssociates]

They won't have charged you VAT, but you could of had to pay import VAT when they came in? Often this bill comes from the courier. Sometimes you might get a doc called a C79 showing the VAT paid.

[@HeelanAssociates]

@J g sounds like for whatever reason customs didn't deem it necessary to charge import VAT on it. Can happen for certain items/amounts.

[@shidoshi22]

hi im about to sell on amazon uk im not vat registered. do i need to be ? i will only be selling from clearance stores items and flipping the items on amazon. so its only a side hustle to make 300 too 400 a month .. many thanks

[@HeelanAssociates]

No usually don't have to be, it's about monitoring your turnover to see when you'd *have* to.

[@farahsabz8468]

@@HeelanAssociates hi, how do I check my total taxable turnover for last 12 months in Xero to check that it is actually above the vat threshold.

[@hannahkris6929]

If a limited company buys service from a sole trader who is not VAT registered, obviously the limited company would not pay VAT and therefore as long as they dont claim any VAT for this service but only show as expense paid to the sole trader, they would be correct ? ie no VAT to pay or claim back.

[@HeelanAssociates]

If I've read your question right, then yes no VAT is in play, so you wouldn't record any VAT in your book-keeping records as the limited company.

[@hannahkris6929]

@@HeelanAssociates thank you very much for the clarification. Much appreciated. I like your videos.

[@HeelanAssociates]

Thanks Hannah! Glad you enjoy@@hannahkris6929

[@AmieDibba]

in order to claim a reclaim for up to 4 years ago, where it says "From what date do you want the business to be registered?" do I need to backdate up to the 4 years or is it that I can reclaim up to 4 years regardless of the date of registration? Also, if you are a small business considering voluntary registration and you are looking to reclaim VAT, does it make sense to voluntarily register if there isn't much to reclaim (if the reclaim option is a key driver in registration), if so what amount would you say is just not worth it? Thanks!!

[@HeelanAssociates]

You claim backwards from the date of reg, so don't put a four year old date there or you will be sad (for various reasons!) You'd put reg date from date you wanted/had to start charging VAT. This video might help with your other q, but in short, REALLY consider if it's worth registering. It's normally a decision based on who your customers are oddly..... kzbin.info/www/bejne/bmPahp9tqN91hqs

[@AmieDibba]

@@HeelanAssociates thanks so much. Do you do consultations? as I have a few follow up questions.

[@iftikharhussain1559]

V r doing small business on amazon and below 85k threshold. However being new v mistakenly deposited VAT on total revenues. So v made 2 mistakes one v got our company registered being below 85k and second paid more than 500 gbp as vat on total revenue. Ur advice is appreciated if u kindly tell us how v can reclaim vat and how u can help us in this matter and what r ur charges. Best regards

[@HeelanAssociates]

Hi! As this one is so specific to your situation we can't give that advice here for professional reasons. It maybe you are able to de-register; depending what you've claimed (or not!) there are consequences to this. If you'd like to potentially get our help with this, you can get in touch with our team: [e-mail] 02392 240040 They can see if/how we could assist and the cost of the services needed.

[@farahsabz8468]

Is it not on total revenue?

[@oibab1475]

Great video. Going back to point 2; If a VAT registered re-seller, purchased items from a non-VAT reg supplier, to re-sell on Amazon, what is the correct VAT calculation for this transaction? Would the VAT registered re-seller simply have to pay 20% on the sale price (as there is no VAT to reclaim off of the purchase)?

[@HeelanAssociates]

In short, if I’ve understood correctly then yes. Re seller of vat registered likely need to charge vat. Whether they paid any vat on the product they bought won’t change whether vat is charged onward. Hope that helps.

[@oibab1475]

@@HeelanAssociates ok, cool! Thanks for the response. Appreciate it a lot!