Content
Leading article...
We can't go on like this...
General tax...
The name is Bond
Blessed are the givers
Excuses, excuses
PAYE the penalty
Silver and gold
Moving goalposts
Doctor, doctor...
Something phishy
Pension problems
Tax dot com
Unpleasant discoveries
Fair's fair (at last)
Chartered taxpayers
This year, next year
VAT...
Focus your mind
Flat rates aren't flat
Reverse the charges
Flapjack flash
Ready set ECSL
A lofty idea
Law items...
I want my lawyer
Not on my holiday
A grey area
No difference
| If you pay a builder to convert your loft into a room, everything you pay is VATable - if the builder is respectable. The builder may use individual sub-contractors to do plumbing and plastering who are too small to be VAT-registered - so the builder's costs are not VATable, but all the sales are chargeable. A company came up with an ingenious idea to get around this - instead of contracting to build the loft, it offered to organise the project. The client contracted individually with Tom, Dick and Harry for all the work, and only the "management fee" carried VAT. Not surprisingly, the taxman didn't like it, and persuaded the Appeal Tribunal that it didn't work - the real supply was the normal one, and the company should have charged VAT on everything. Now the High Court judge has sent it back for the Tribunal to think again. He ruled that the signed contracts are the starting point in deciding who does what for VAT. If the Tribunal thought "the real supply" was something else, it would have to base that more clearly on the evidence. This trader hasn't won yet, but he has a second chance to persuade the Tribunal to cancel an assessment for more than £1m of VAT that he didn't think he had to collect from his customers. This was an ingenious idea, but the dispute is a reminder of two things if you use a cunning plan to reduce your tax - you have to be prepared to argue with the taxman, and you have to make sure that you will win on the evidence.  |
© Bayar Hughes & Co., 2010.