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The Accountants for Growth

Getting the most out of VAT

Getting the most out of VAT

Every year VAT is becoming increasingly more complicated as HMRC continuously amends and introduces new rules and regulations. In conjunction with this, the government is working harder than ever to clamp down on any tax irregularities.

Noting the above, this means now more than ever businesses and individuals must make sure they are accurately reclaiming VAT on expenses!

To help you along this path, please find below a few examples to help you claim as much VAT as possible!

(1)   Parking your car – parking your car off street or within multi-story car parks is VAT applicable whereas roadside parking is not subject to VAT.

(2)   Eating food – Eating food at a café means you will be charged VAT. However if you order your food to take-away this will not be VAT applicable (on certain items eg a sandwich).

(3)   Gifts – You can reclaim VAT on gifts bought for employees as long as they are less than £50 (net) in value. Please note the limit of £50 applies for 12 months. Therefore do not be too generous as VAT will not be recoverable!

(4)   Car rentals – If you want to recover VAT when providing a car for your employee(s) then make sure you lease instead of buying it. 50% of the VAT on leased cars is reclaimable whereas no VAT is allowable on purchase! For short term leases (<10 days), the full 100% of VAT is allowed to be reclaimed (assuming the car is used 100% for business).

(5)   Entertaining – Pick employees over clients when choosing who to entertain as VAT is recoverable for you to entertain staff (not so for your customers).

Hopefully my top 5 VAT problem areas are now a little clearer with regards to what can/cannot be reclaimed.

Obviously there are a whole host of other VAT issues, so if you would like some guidance as to what VAT you are entitled to reclaim, contact us now on 0121 706 8585!


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The information provided in all of our blogs reflects only a narrative of some elements to consider on the topic. The blogs do not contain considered legal or accounting advice and should not be relied upon as advice. Please see our website's terms and conditions for full details of our disclaimer. If you are interested in obtaining advice, please contact us and one of our accountants will be happy and able to advise you on your own particular circumstances.



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