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  • Tax Memo - Value added tax - Registering for VAT - 76000
    All persons who are in business and make or intend to make taxable supplies (¶75045) of goods and services in the UK may be liable, or entitled, to register for VAT. VAT registration may be either compulsory or voluntary, and the requirement for registration may vary throughout the life of a business. Recoverable input tax (¶79050+) can be reclaimed on all relevant expenditure from the date of registration. In addition, it is possible to reclaim input tax on certain types of expenditure incurred before becoming...
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  • Tax Memo - Value added tax - Supplies - Time of supply - Specific rules for certain services - Continuous supplies of services - 77640
    Special rules apply where services are supplied over a period of time and under terms that provide for the consideration to be determined, or payable, periodically or from time to time. These are referred to as continuous supplies of services Where services between unconnected parties, other than those in the construction industry (¶77655), are supplied over a period for a consideration which is determined or payable periodically, the services will be treated as separately supplied at the earlier of the time...
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  • Tax Memo - Value added tax - Routine VAT - Bad debts - Suppliers - Amount of the claim - VAT calculated on the profit margin - 81425
    If the VAT on the supply was calculated on the basis of the profit margin, the bad debt relief available is the VAT element of the outstanding profit element of the supply. Traders using the second-hand margin scheme (¶82000+) and undisclosed agents (¶82595) are affected by this. Ms L supplied goods to M Ltd under a margin scheme. The goods were supplied for £1,200, of which £300 represented the profit margin. If M Ltd pays £800 in respect of the goods, the amount of the debt is £400, which exceeds the...
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  • Tax Memo - Value added tax - Routine VAT - Cash accounting scheme - Special situations - Outsourcing debt collection - 81615
    Where the debts of a business are collected by an agent, VAT must be accounted for in the period in which the agent receives the payment. VAT is due on the full amount received by the agent from the customer, not any reduced amount paid by the agent to the supplier. Where a business sells a debt, it must account for VAT in the period in which any debts are sold or assigned. VAT is due on the full amount of the debts sold or assigned, not the consideration for which they are transferred. If a debt is factored...
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  • Tax Memo - Value added tax - Specific situations - Agents - 82455
    The VAT treatment of agents depends on a number of factors, such as whether the agent is acting in its own name or in the name of the principal, the location of the principal, and the actual nature of the service that the agent provides.
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  • Tax Memo - Value added tax - Special accounting methods - Flat rate scheme - Operating the scheme - Limited cost trader - 83115
    The following table shows the rates applicable to the various business sectors defined by HMRC. Category of business carried on Flat rate % Accountancy or book-keeping 14.5 Advertising 11 Agricultural services1 11 Any other activity not listed elsewhere 12 Architect, civil and structural engineer or surveyor 14.5 Boarding or care of animals 12 Business services not listed elsewhere 12 Catering services, including restaurants and takeaways 12.5 Computer and IT consultancy or data processing 14.5 Computer repair...
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  • Tax Memo - Value added tax - Land and buildings - Place of supply - Services relating to land - 84055
    Services in connection with land are treated as supplied in the country where the land is situated. This applies to: - the grant, assignment or surrender of: - any interest in or right over land; - a personal right to call for or be granted such an interest or right; or - a licence to occupy land or any other contractual right exercisable over (or in relation to) land; - any works of construction, demolition, conversion, reconstruction, alteration, enlargement, repair or maintenance of a building or civil engineering...
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  • Tax Memo - Value added tax - Cross-border transactions - Goods outside the EU - Exports - Zero-rating - Use of agents - 85930
    Both the exporter and the overseas recipient may appoint an agent (such as a freight forwarder, airline, shipping company or other person) to act on their behalf by handling the export transaction and producing the necessary declarations to HMRC. The agent must be provided with full information on the goods so that it can complete the appropriate documentation; it must then take reasonable steps to ensure that all of the export formalities are complied with. If the agent fails to comply with its obligations,...
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  • Tax Memo - Value added tax - Administration - Reporting - Authorised agents - 87120
    HMRC will only release confidential information about a business to an agent, such as an accountant or business advisor, if appropriate authorisation is sent to HMRC. 1. A trader who wishes to authorise an agent must complete form 64-8 and send it to HMRC. If the trader is authorising an agent for other taxes as well, this can be done on the same 64-8. 2. It is possible for agents to register to submit their clients' VAT returns online (¶87165).
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  • Tax Memo - Stamp taxes - Stamp duty - Special situations - Transactions carried out by professionals - Intermediaries - 92670
    Relief is available for stock transfers to a member of a regulated market, multilateral trading facility, or recognised foreign exchange on which stock of that kind is regularly traded, or to an intermediary who is recognised as such by the market, facility or exchange. 1. For this purpose an intermediary is defined as a person who carries on a bona fide business of dealing in stock and does not carry on an excluded business. 2. An excluded business: - consists mainly of making or managing investments; or -...
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