VAT Bench-Marking

22nd December 2014

Motor Vehicle Garages and Furniture Retailers: Beware VAT Margin-Benchmarking
Have you received a letter from HM Revenue and Customs headed “transparent benchmarks”?.
Around 7,500 businesses engaged in the repair and maintenance of motor vehicles and in the retail sale of furniture are likely to receive these letters. The letters provide details of the anticipated relationships between the entries appearing in boxes six and seven of the trader’s VAT return, the VAT Mark-up ratio. The idea is to test whether publishing benchmarks for indirect taxes helps a taxpayer identify any mistakes they may have made on their VAT return and complete it correctly. The letter suggests that if the VAT Return does not reflect what HMRC expect then the trader should re-check his figures.

Because this is a controlled pilot exercise, not all businesses within the relevant sectors will be receiving a letter.  Those that do, should not read too much into it. HMRC state that they are expecting Motor Garages to have a ‘VAT Margin’ of between  27% and 82%. Statistically, such a wide target range surely makes a nonsense of this whole exercise?

Blog entry from: Jim Harrison. 



 
Other items in Blogs
 
Fiona Mann
22nd July 2019 Exam Success – World Beating Results!

  We’ve had some extraordinary exam results over the last few days – staff at Whiting & Partners have excelled themselves. Luke Bacon from St Ives office has achieved an outstanding result of 99% for the Financial Accounting and Reporting exam – coming joint first in the world.  This result has been recognised by the…

Read More »

Matilda Mawson
19th July 2019 Changes to Entrepreneurs Relief from 6 April 2019

Entrepreneurs’ relief allows a reduced rate of capital gains tax on disposals of all or part of your business assets. The reduced tax rate is 10% on up to £10 million of lifetime gains. There have been a number of significant changes to entrepreneurs’ relief in the last year, tightening the rules on qualifying conditions…

Read More »

Ernesta Petkeviciute
19th July 2019 New SRA accounting rules – what’s changing?

The current Accounts Rules are made up of over 40 detailed requirements, making it difficult for firms to fully understand what is required of them, as well as giving firms no flexibility to adapt them to their own practices and decide how best to look after client’s money.   The new rules coming into effect…

Read More »

Vanessa Pearson
15th July 2019 IR35: private sector off-payroll rules for contractors

This week HMRC have published draft legislation that will affect private sector personal services companies (PSCs)  from 6 April 2020. PSC’s supplying services to medium or large-sized organisations will no longer decide if they are employed or self-employed, the end engager will assess this. If caught by these rules, known as IR35, employment taxes and…

Read More »

Paul Jefferson
15th July 2019 Company car tax changes – Government will remove BIK company car tax on Electric Vehicles from 2020/21

The government has provided positive news for Company car drivers announcing that a pure electric vehicle (EV) will no longer pay benefit-in-kind (BIK) tax in 2020/21 following a review which looks set to boost sales of emissions-free cars. HM Treasury’s response to its review of the fallout from the roll-out of the Worldwide Harmonised Light…

Read More »

Barbara Nicholas
9th July 2019 31 July: Can you elect to reduce your tax payment?

Most individuals who are required to prepare and submit a self-assessment tax return to HM Revenue & Customs in each tax year should now be preparing for their next half-yearly tax payment which is due by July 31.   This tax is the second payment-on-account for the 2018/19 tax year. It is automatically calculated as…

Read More »