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VAT: Sink or Swim

VAT is a tax that businesses ignore at their peril. However, if you seek advice pro-actively, the rules can be used legitimately to your advantage.

Simon Levine, a senior VAT consultant with VAT Consulting UK, recently advised a company that was charging VAT on swimming courses. Using a lesser-known exemption, we were able to advise the company that it could restructure its operations, so most of its courses could become VAT-exempt. The potential effect is enormous, as it means the company’s income can increase without having to put up its prices.

By contrast, in another case that we came across recently, a business that had purchased a large property had structured the deal in a particular way for financial reasons. However, in doing this, it inadvertently fell foul of some VAT anti-avoidance rules, which are likely to prove expensive in the future. Had the transaction been presented to us for our advice before the purchase took place, alternative structures could have been recommended, resulting in a large VAT saving.

And the moral of these two contrasting scenarios? Forward-plan and save VAT, or disregard VAT and count the cost.

VAT Consulting UK is a specialist that can provide advice either directly to your business, or in conjunction with your accountants, as you prefer. Initial meetings, without obligation, are free. For further information, click here.

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