If a taxpayer wants to use a partial exemption input tax recovery method other than the standard method then a special method must be agreed with HMRC. HMRC has amended its process for the submission of online and email applications. Regardless of which route is used for the application, detailed information must be provided to support the application and discussions with HMRC to agree the method can take several months to conclude. More detailed guidance on how to apply for a partial exemption special method is contained within Appendix 2 of the Public Notice The online application process begins here.
Comment: When the partial exemption standard method does not produce a fair and reasonable VAT recovery result, a special method may provide the solution. However, the process of agreeing this with HMRC can sometimes be a protracted affair. The onus is on the taxpayer to demonstrate why the standard method does not provide a fair and reasonable outcome and how the special method achieves this. We regularly help our clients achieve successful results with applications for a special method.
If you have any questions or need assistance or advice in your application for a special method, please contact Alison Hone VAT Partner. HMRC has announced that from 31 March , the UK will have a single customs platform for import and export declaration purposes. Customs agents, freight forwarders and carriers, as well as businesses that have their own in-house customs declaration teams, will need to prepare for the change. Since 1 March, subcontractors have not received VAT payments for their services as under the previous tax system, unless they were working directly for the end client.
Instead, they will reverse-charge it on invoices with only the main contractor actually collecting the VAT from the client to pay on to HMRC. The changes mean many suppliers have moved to a position of claiming VAT refunds from the tax body. Build UK said it recently held a meeting with HMRC representatives over issues of slow payment that it claimed had been hitting cashflow.
If your repayment is exceptionally delayed, HMRC may make an extra payment too. After you cease trading and de-register for VAT, HMRC may allow you to reclaim VAT on the supply of goods and services that relate to the time when you were registered, and on certain services supplied after you de-registered.
Find out more about de-registering for VAT if you cease trading. Any repayment will be paid directly into your bank account, but before HMRC make a payment, they follow a number of steps: When you submit your return, HMRC registers the date on which they receive it. HMRC carries out automated credibility checks. The majority of returns pass these checks and proceed immediately for payment.
If the automated credibility checks select your return for further investigation, it will then be checked manually. Contact HMRC if you have not heard anything after 30 days. HMRC does not count days taken to check your return is accurate and legitimate, and to correct any errors or omissions, as part of this day period. All VAT repayments will then be sent to this bank account. You can also use the form to change uncashed cheques into electronic payments to your bank account or update your bank details.
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