VAT Inspection - What to expect?!

[km8]

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YMMV, my experience was very different, with regard to the detail.

The bottom line was, once they were satisfied that I wasn't screwing them, they could care less about separate bank and credit card accounts, etc.

None of those are requirements for a sole-trader, and as for BIK, it sounds like he didn't know his a**e from his elbow or his preconceptions from the revenue's rules.

[sasquatch]

Useful thread, how far can/do they go back? Nothing to hide just interested! Im about to register for VAT..

[deadgoodundies]

We've got a VAT inspection in a couple of weeks (gulp) although it is a voluntary tax inspection as after 4 years our accountant realised that the book keeper had been submitting invoices for NON EU countries as VATable which kind of means we've overpaid £40,000 + interest to the taxman. Fingers crossed we've got all our paperwork in order and they will find in our favour and give us our money back.
I've never had a VAT inspection before but my wife has and it was a horrible experience for her (involved the inspector threatining to take her computers away unless he gave her XXXX amount in cash there and then (not a cheque).

If we do get the money back it means we can pay off all our stock bills in one go plus have some left over for 1 week to thailand to see some friends.

[KGP]

I've never had a VAT inspection before but my wife has and it was a horrible experience for her (involved the inspector threatining to take her computers away unless he gave her XXXX amount in cash there and then (not a cheque).

talking about a bribe?

[deadgoodundies]

No just the value if what was owed to the VAT man.
Basically pay there and then or I take your stuff away.

[KGP]

you pay there and then you take a receipt and thus the tax goes to the goverment

or pay there and then under the table and the money goes to VATman's pocket?

[deadgoodundies]

Why did they have a problem with you using sage accounts ?

[averasolutions]

If you use the CJ UK address then you'll have to include VAT
As CJ dont add VAT you'll have to gross down

You are incorrect - they do pay plus VAT if you supply your VAT number. - Why had a real problem with them as they didn't pay us + VAT the first time...

...we called the VAT office and they got in touch... Next thing - the VAT was paid into our account. Sorted.

OUCH - The dreaded VAT inspection.

I have owned 3 businesses in my years and had two VAT inspections both of which lasted 3 hours 'ish.

Give them a clean desk, supply a calculator and a cup of tea, and leave them to it - don't talk to them about anything other than the weather unless THEY ask YOU.

...and be prepared for them to ask some very strange questions.

At the end of the day, they are there to catch out VAT and tax evadors. And within 3 years you are almost definately going to get an inspection.

If your book-keeping skills are good (or you use SAGE properly) then they should be gone in 2 hours.

Let us know how it goes...

[bakerdvd]

You probably just drew the short straw unless something flagged up on their system which they want to check.

[pericom]

Just had one today.

Was about as easy and relaxed inspection as you can get. I'd been getting papers teogther for weeks
and he never even looked at them. Was here for just over 1 hour, top bloke.

BTW: They have call logs to any helpline you call and also they can monitor your home phone and they can see which numbers
incoming/outgoing have been called. Pretty much confirmed by the VAT man.

[chromate]

Well, I haven't had an inspection. However, try not to worry about it! Making yourself sick over these kind of things is just not worth it. As long as you're not scamming the system or grossly negligent, you should have nothing to worry about! A few mistakes, where they would actually owe you money shouldn't be a problem.

I hate the way HMRC instills this kind of fear in people. Remember, they're acting on behalf of the government to serve US all!

[tomsyboo]

If you use the CJ UK address then you'll have to include VAT
As CJ dont add VAT you'll have to gross down

I am VAT registered and have become 'expert' very quickly. I have many MHRC friends now It is not legal to "gross down". If the commission was £100 then this is the amount paid for the service and the VAT is £20. If you "gross down" then you will be saying the service cost was £83.33 and the VAT £16.67. Hence you just didled HMRC out of £3.33. HMRC actually call this practice of grossing down "tax evasion" as they receive less. The only way it is legal to do that is if you formally agree with the other party that the commission to be paid is less in the first place.

ps. I have also found that HMRC do not understad commissions and particulary online commissions. When I take to the time to educate them then it all falls into place nicely.