VAT do's and don’ts

04th November 2009

DO keep a monthly record of your turnover - late registration can result in severe penalties
DO notify your local HM Revenue & Custom's office when major changes take place - changes must be notified within thirty days
DO retain records for the last six years - these could be demanded by law
DO obtain and keep VAT invoices - these are your authority to claim back VAT on supplies made to you
DO charge VAT on supplies to your staff
DO charge VAT on any equipment or vehicles (except motor cars) that you sell or part-exchange
DO account for VAT on fuel used for private motoring using the appropriate scale charge
 

DON’T claim the VAT paid on the purchase of a motor car - it is not recoverable except in some very special cases
DON’T claim the VAT paid on goods or services used for private purposes. Where there is an element of private use (e.g. telephone) an appropriate percentage should be claimed. Special arrangements apply to private use of petrol (see above)
DON’T claim the VAT paid on entertaining
DON’T forget to account for VAT on inter-company charges
DON’T charge VAT on the transfer of a business as a going concern (make sure contracts incorporate appropriate VAT provisions)
 

Source: Adderblack.co.uk