UK VAT Bookkeeping

UK VAT Bookkeeping

The mesmerising mess surrounding the failed VAT appeal made by First Agency Limited (TC06593).  This should be a lesson to everyone to get their house in order and understand why you need good UK VAT Bookkeeping. 

The taxpayer lost nearly £150k VAT under two headings.  Mainly due to claims being made out of time. 

There were clearly problems in how the accountant handled VAT.  Not least evident lack of commerciality in its dealings with one company in particular.  The appeal report reads as though the acocunting system must have been out of control. 

Specific failings included the accountant not controlling or monitoring commission payments.  This was to such an extent that commission charges were four times what they should have been.  His approaches to handling VAT were described as ‘non-standard’.   This culminated in failing to make claims for Bad Debt Relief within the time limits so the releif was lost.  So we aren’t looking at anything complicated, just poor housekeeping.  The really sad thing is that all of the issues were avoidable had anyone paid sufficient attention.

Given that VAT is a self-assessed tax there is an unavoidable obligation to keep proper records and control what is happening.

Learning the hard way why everyone needs to have solid UK VAT bookkeeping.  The burden of proof sat squarely with First Agency and the company paid a hefty price for using an accountant who was unable to meet the obligations.  Lessons for all here.

If you are not at all sure about the right way to do something related to VAT please get it touch.  It is better to avoid VAT problems rather than let unnecessary costs fall due.  In this respect, as with anything related to UK VAT, sooner is always better.

Posted in VAT Appeals.