VAT is the question
VAT is not the ‘simple tax’ which Chancellor Anthony Barber referred to when it was introduced in 1974.
While it may not offer planning opportunities to all businesses, there are many for which careful thought can realise genuine – and significant – savings.
The first question – for the smaller business – is whether or not to register voluntarily for VAT. Where work is predominantly ‘B2B’ in nature, registration is most likely to generate significant savings.
Other businesses should consider whether being part of a flat-rate scheme might present advantages. While these schemes were introduced principally to simplify administration (for both HMRC and trader), in some circumstances there could be big tax savings on offer. Discuss this with your accountant.
Another sector where VAT planning can commonly lead to savings is in the area of property development. This is a complex field – and one that definitely requires professional advice – but big savings can be made and, importantly, big costs can be avoided!
ACTION: Next time you meet your accountant simply pose him the question: “Are you sure that I’m not missing any tricks in the way I deal with my VAT?”
“Another sector where VAT planning
can commonly lead to savings is in the
area of property development.”