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Year-End Tax Guide 2017/18 | 9
VAT is chargeable where taxable turnover is above
£85,000 in the previous 12 months or you expect this
threshold will be exceeded within the next 30 days.
There are schemes which simplify VAT accounting,
including the cash accounting scheme, annual accounting
scheme and the lat-rate scheme.
However, changes to the lat-rate scheme from
April 2017 have made it less attractive (and even costly)
for some businesses.
PLANNING
Would it be appropriate for you to use one of
the schemes?
Have you reviewed the use of the lat-rate scheme and
taken appropriate action, such as including voluntary
deregistration for VAT if trading under the deregistration
threshold (£83,000)?
Are you claiming any VAT bad debt relief you are
entitled to?
Are you accounting for VAT on the fuel used for private
motoring using the appropriate scale charge?
Make sure you don't reclaim VAT on cars (unless you’re
a car dealer or taxi company, for example, or provide
certain pool or leased cars for employees) or on
entertaining UK customers
PENALTIES
VAT
The penalty regime covers income tax, corporation tax,
VAT and IHT.
Miss the irst income tax return iling deadline and the next
day you are liable for a £100 ine.
Leave it for another three months and the maximum penalty
rises by £10 a day up to a maximum of £900.
After six months, a further £300 or 5% of the tax
due – whichever is the higher – is added. In some
serious cases, the penalty can be even higher.
There are also penalties to cover the notiication of
starting a business and iling returns and accounts at
Companies House.
Penalties range from £150 for a private company iling the
accounts not more than one month late, to £7,500 for a
public company iling accounts more than six months late.
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