Cookies are small text files that are stored on your computer when you visit a website. They are mainly used as a way of improving the website functionalities or to provide more advanced statistical data.
July Question and Answer Section
Newsletter issue - July 2013.
Q. My company provides website hosting for businesses based in the UK and in other countries. For VAT purposes is this treated as a sale of goods or services?
A. There is an easy rule of thumb to decide whether something is goods or services for VAT purposes: can you pick it up and hold it? Yes: goods, No: services. Website hosting can't be physically picked-up therefore it's a service. There are some complex VAT rules for selling services across international borders. You need to know whether your customer is in business or not. Broadly if the customer in another country is a business you do not charge VAT. We need to talk through the detail of what you declare on your invoice and what evidence to collect from your customer.
Q. I run my own consulting company in the UK, which pays my Brazilian wife a small wage for answering the phone and preparing marketing materials. Can the company pay for her to complete an advanced English course at the local college?
A. Training for any employee can be charged through the company if it is relevant to the employee's duties or future duties. An ability to speak and write correct English is necessary for your business so the proposed English course is work-related training for your employee. Your company can pay for the course, and receive a tax deduction for that cost. There will be no benefit in kind charge for your wife. The company can also pay for travel to the course. You should list the duties your wife performs for the company, and both sign the document as part of her employment terms with the company. This description of her duties will justify the training cost, should the Taxman ever ask.
Q. I bought a 200 acre farm last year, where I will be raising rare-breed animals for the high-end restaurant market. I've incurred a lot of costs on fencing and equipment. Can I claim back the VAT on those costs? I've not registered for VAT yet, as my sales have been low so far. I understand there is a simple flat rate scheme I could use.
A. You can't claim back VAT on your costs until your business is VAT registered. However, at VAT registration you can reclaim VAT paid on goods purchased in the four years before registration which are still held at registration date. VAT on pre-registration services can be reclaimed but only for services purchased in the 6 months before registration.
As your main product will be meat, which is zero rated for VAT purposes, you are likely to reclaim VAT every quarter, rather than paying VAT to HMRC. The flat rate scheme for small businesses is not suitable for businesses that regularly reclaim VAT. There is a flat rate scheme just for farmers, but it is very rarely used. We need to discuss the details of your proposed sales to see which VAT scheme may be suitable.
What our clients say about us...
"Paul has provided accountancy services to my company for 2 years now. I can recommend Paul very highly; his skills as an accountant are highly detailed and professional and he is always available to provide advice. One aspect of the way Paul works that I greatly appreciate is a preference to meet face to face when there is a detailed conversation to be had. I personally find this more productive and is a benefit of working with a small accountancy firm that you wouldn't get with the large faceless providers."
ALISTAIR FAIRWEATHER - PROGRAMME & PROJECT MANAGER, DELIVERING/RESCUING I.T. 7 BUSINESS CHANGE WITH BUDGETS UPTO £50M INC SUPPIER MANAGEMENT
"I couldn't ask for more from Paul as an Accountant. Paul has been accountant to Work Relief Charity Recruitment for just over a year now and is proving an invaluable asset. Accurate, knowledgeable, flexible with an emphasis on service delivery, I would recommend Paul's services to any organisation looking for an accounts professional."
Neil Price - Managing Director at Work Relief Charity Recruitment
"Paul was a referral from a family member when I started my business 2 years ago. As this was the first time I had ever run my own company I was totally clueless over the financial side of matters and was worried that I may have made mistakes in any of my accounting. I needn't have worried as after enaging Paul for a set monthly fee he was always there on the end of the phone for all sorts of questions I had and no matter how trivial they were Paul gave me all the information I required and more and did an excellent and painless job at the end of my first year! Couldn't ask for any better to be honest. Just two words - hire him!!!"
Lee Westrap MBCS - Director - Bulldog IT Services
Please complete our form
to request a callback
Competitive fixed quotes
for agreed services
Increase your profit and
reduce tax liabilities
Expert advice for your
business size
