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Christmas Parties

The taxman will allow a business to spend up to £150 per employee on a Christmas Party.

The VAT man does not have a limit on how much you can spend and claim back.  He may argue that the party includes an element of personal enjoyment - in which case he may disallow VAT on half the cost.  However, this is unusual and unlikely to be an issue.

Warning:  If you go just 1p over the £150 limit the whole lot will be disallowed.

        

      

         

  

           

           

 

Articles - VAT

Welcome to one of the Windermere & Bowness Chamber of Trade Articles pages. Here you will find articles on VAT.

The views expressed in these Articles are not necessary those of the Windermere & Bowness Chamber of Trade and are provide for information only.


  

    VAT:  

                


 

Major Changes to VAT

As from January 4th 2011 the standard rate of VAT increased to 20%.

The VAT rules for business who:

  • Supply services to or receive services from overseas businesses

  • Supply goods to other EC countries

  • Reclaim VAT incurred in another EC country

also change and where, how, and when VAT is accounted for, completion of EC Sales Lists and reclaiming VAT incurred in another EC country are all affected.  You must consider now whether the changes affect you and what you need to do to prepare for them.  Further information can be found at: www.hmrc.gov.uk/vat/

VAT filing and payment arrangements

Under Government proposals, from 1 April 2013 the way some businesses file their VAT returns and pay any VAT due will also change:

  • all VAT registered businesses with a turnover of £100,000 or more (excluding VAT); and

  • all businesses newly registering for VAT, whatever their turnover

must file their VAT returns online and pay any VAT due electronically.  If your business falls into either of the above categories, the changes apply to all returns covering accounting periods on or after 1 April 2010 and the HMRC will no longer issue paper returns after this date.

Filing returns on paper will still be an option for the remaining VAT registered businesses, but this will be reviewed in the run up to 2012.

From April 1st 2012 nearly all VAT registered business will have to file their VAT Return online.


 

VAT Inclusive Calculation

As from the 4th January 2011 the Standard Rate of VAT in the UK was increased from 17.5% to 20%. 

In order to work out the amount of VAT in an amount that contains VAT, the fraction to use is 1/6th (divide by 6).

Example:

Item costs £120.00 including VAT.

VAT element is 1/6th of £120.00 = £20.00


 

 
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