Top ten potential VAT problems

Key points

• Take particular care when dealing with unusual situations.
• Check to ensure there is no fraudulent element to a transaction.
• Do not rely unquestioningly on HMRC advice.
• Has the client fully understood the advice provided?
• The bar for the reasonable behaviour test is now high.

I am often asked for my top ten VAT issues – a shortlist of how the tax can go wrong or less VAT can be paid. And I understand why the question is asked – businesses want a quick and easy checklist to make sure they pay as little as possible and stay on the right side of the law. The problem is that it can go wrong in almost limitless ways. After all it is a self-assessed tax being handled by people focused on other things such as running their business so it’s almost inevitable that mistakes will be made.

In my world the saddest two words...