Basic Errors In VAT

• if you buy fuel for a motor car which is put to private use, do not forget to add a fuel scale charge for each car to your output tax 
• you may not claim the input tax on the purchase of a motor car except where there is 100% business use or, in the case of a taxi or driving school car, predominantly business use 
  do not reclaim input tax on any form of entertaining 
• if you take goods from your business you must account for output tax on their full sales value 
• if you sell an asset used in your business you must account for output tax on this sale (there are special rules for cars) 
• do not reclaim VAT on purchases of goods or services unless you have a valid VAT invoice 
• do not reclaim VAT on purchases of goods or services for personal use, such as home telephone 
• if you sell goods to private individuals or unregistered businesses in other EU countries you must charge VAT as normal 
• if you have reason to use a rate of VAT on a sale of anything other than 17.5% make certain that this rate is correct.

Simple errors over long periods can lead to a substantial bill for undeclared VAT. Please contact us if you would be interested in a VAT health check for your business.

If you are concerned that you may have made some of these errors contact Colette White on 02476 554311 at Prime Pilleys or John Osborne at Prime Rafterys on 0121 711 2468.

For information of users: This material is published for the information of clients. It provides only an overview of the regulations in force at the date of publication, and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material can be accepted by the authors or the firm.

Prime Chartered Accountants
Fact sheet published November 2006