Our retail client issued vouchers for redemption in-store.
Issue
The client did not keep a proper record of redemption the risk was that the client accounted for more VAT than they needed!
How we solved it
We examined the voucher issuance and redemption process and helped the client pinpoint transactions where no VAT adjustment had been made, even though a voucher had been redeemed (so the full price was not ultimately paid).
The Outcome
As a result the client made a claim to HMRC for a refund of the VAT that they had overpaid.
Our client ran a firm that specialised in finding investors for high-tech startups. They had a complex commission structure partly based on the potential future value of the businesses into which investment was placed.
The issue
Our client had received conflicting advice on the VAT treatment of its activities.
How we solved it
We reviewed the activities, its sources of income including the mechanism under which it was paid for its services. We reached a conclusion, based on sound analysis of the VAT legislation, HMRC guidance notes and relevant caselaw, that our client’s services were VAT exempt.
The outcome
Our client was able to move forward with certainty on how VAT applied to its business.
Next Steps
If you are having difficulty navigating VAT for your business then get in touch with ETC Tax and we can guide you on all tax matters.
HMRC confirmed today that ride-hailing giant Uber would pay £615million in outstanding VAT payments.
It is understood that an agreement between the two parties was made earlier this week.
Uber initially feared facing a VAT bill above £1.5 billion after the February 2021 Supreme Court ruling. The ruling said that their drivers were Uber employees rather than independent contractors.
The VAT bill relates to the period before March 2022. It is understood that Uber changed its contractual arrangements and began to pay VAT to HMRC.
Uber had argued that it was the driver supplying the fare as principal. Meaning any requirement to account for VAT on the fare falling to the driver, who in the main wouldn’t be registered for VAT.
Although the ruling only related to Uber’s London operations, it is expected to apply across the UK. The ruling will confirm the extent to which the revised position will apply across non-London locations is due to be released later this week.
“On October 31, 2022, we resolved all outstanding HMRC VAT claims related to periods before our model change on March 14, 2022. We do not expect any significant impact to the income statement as we have adequate reserves recorded as of September 30, 2022, related to this resolution,” read the statement.
Concluding, “we expect a cash outflow of approximately GBP 615 million during Q4 2022 for this resolution.
Further HMRC scrutiny on taxi firms or delivery firms who use similar arrangements is now inevitable.
