Happy Accountant: Accounting Blog & Online Accountant

* HMRC has had a VAT amnesty over the summer.  This is the chance for those people who should have registered for VAT but haven’t to come forward and bring their affairs up to date with potentially reduced penalties as a result. For those already registered, you can also use the amnesty period to notify HMRC of previous [read more]

*Unfortunately, mainstream accounting software (such as Sage, Quickbooks, Tas and so on) generally do not handle the VAT Margin Schemes automatically). There are “bolt-ons” and modules available – at a price – for some of these packages, which will handle the VAT Margin Scheme and the required stock book.  These tend to work best if [read more]

*You must keep a stock book to be able to operate the standard VAT Margin scheme, which references each item, it’s purchase price and sale price. You must be able to track an item from purchase through to sale. Sales invoices for goods sold on the VAT margin scheme must state that a margin scheme [read more]

*First you need to work out the difference between the purchase and the sale price.  This difference is the VAT-inclusive margin.  Calculate the VAT element of the VAT-inclusive margin by multiplying it by the VAT fraction.  This is the VAT to be paid on the sale.  (You can still claim the VAT back in the [read more]

*VAT Margin schemes will save eligible traders money. This is because you only pay VAT on the margin, that is the different between the sale and purchase price. If you sell something “at a loss” then there is no VAT to pay on that sale. You can use a margin scheme on some goods and [read more]

*Normally, with the standard VAT scheme, VAT is charged at the prevailing rate on the entire sale price and all the VAT is reclaimed on any purchases made. The difference between VAT charged on sales less VAT reclaimed on purchases is what is paid to HMRC. (There are previous blogs on how VAT works in general and [read more]

*There is sometimes confusion over what the difference between Zero-Rate VAT, VAT Exempt & Out of Scope VAT. Zero-Rate VAT items, such as books, childrens clothes and some food, do have VAT on them, it’s just at zero percent, so the actual VAT is nil.  (In Sage, the VAT code to use would be T0).  [read more]