VAT Are They On About?

'HAVE YOU STOPPED beating your wife?' is the famous question to which 'yes' and 'no' both seem unfortunate answers. I always have the same feeling when faced with the question 'do the figures in boxes 3.29 to 3.64 include VAT or exclude VAT?' on the self-employment pages of the tax return. Some do and some do not - the answer is more complicated than the question supposes. But there is no box to tick for 'depends' and so we have to make the best of it.

Most accountants were brought up with Statement of Standard Accounting Practice 5 (whether or not they would remember that is where the rule comes from) and they exclude VAT from sales and from those expenses on which VAT is recoverable. This VAT i.e. the VAT that is payable to or recoverable from Customs does not appear in the...