Readers' forum: Assessment

I act for a client who trades as a window cleaning business and he employs six staff. He is VAT registered and uses the flat rate scheme – his main rate is 12% for other business services which produces a very favourable outcome each quarter.

However the new limited cost trader rate of 16.5% introduced on 1 April 2017 has caused him some problems because he does not buy many goods but we have always been happy that the total purchases of goods have exceeded the 2% and £250 thresholds that need to be considered each quarter so that he can still use the 12% rate. However an HMRC officer is now saying that we should not have included ladders and buckets in the figure for relevant goods because they are capital items. He also said that road fuel for the business vans should be excluded because...