Jason Croke

Just to add to HMRC's useful comments, the property is jointly owned and HMRC will usually see jointly owned assets as being an informal partnership.....when you raise an invoice to a customer what name is on the invoice - is the invoice from you, your husband or from trading name of cottage like "Rose Cottage"......does the income go into a joint bank account or your account/husbands account? Be careful, Only one person is making a supply here, is it you, husband or the "partnership"? If invoice says partnership but money goes into husbands bank account then HMRC will be confused as to whether it is his only , your money or joint money. This is why you need to be clear as to who is making the sale, having separate bank accounts are helpful. You might want to create a formal partnership that clearly defines who the income belongs to and say you agreed a 50/50 split, then the income would come into the partnership and then each partner would declare their share of the income and respective tax liabilities....the sole trader income of £2k per year would remain with the sole trader/outside of the partnership. Also, VAT turnover is based on a rolling 12 month basis, not financial years, so you look at your sales between November 2021 and November 2022 and if over £85k you register for VAT, you do the same exercise reach month (December 2021-December 2022, then January 2022 to January 2023 and so on). if your turning over nearly £85k with a FHL, you should be taking paid advice from an Accountant as there is a lot to go wrong here in terms of VAT, partnership structure and of course there may be benefits and tax reliefs you are unaware of due to not having the right advice. The issue with DIY accounting is that it works up to a point your knowledge is stretched, then you are potentially opening up to mistakes or lost opportunities.

The issue is with your courier/freight agent, they are responsible for submitting the import paperwork to HMRC. However, it should be physically impossible to charge more than 20% VAT, so if you are being charged 26% VAT I can't see how the HMRC import system (CDS) would allow an incorrect rate of VAT to be applied. In terms of children's clothing, the courier is responsible for filing the import paperwork to HMRC, so it is important the courier has the right paperwork, that paperwork comes from you, the commercial invoice that ships with the goods should state a clear description of the goods, when the courier is then entering the import into the CDS import system, they should see that the goods are children's clothing and use the appropriate commodity code (children's clothing)....so either your invoices are clear or the courier is not bothering to correctly input the correct details into CDS....if the courier inputs into CDS "clothing", CDS will assume adult clothing at 20%, if the courier enter in "children' s clothing" then CDS will assume 0 rated. HMRC do have a customs helpline, details here https://www.gov.uk/government/organisations/hm-revenue-customs/contact/customs-international-trade-and-excise-enquiries The helpline may then refer you to the National Clearance Hub https://www.gov.uk/government/organisations/hm-revenue-customs/contact/national-clearance-hub but start with the helpline in the first link and go from there. I'd suggest finding a better courier, but appreciate that the big 5 couriers are not always good at dealing with things like this. Appreciate the courier might be intimidating but I would simply ask them "what rate of VAT is 26%", because no such rate exists and if they confirm they are happy with this rate of VAT being applied in the UK, then escalate to their CEO or even better, make a post on twitter directly to the courier if they have a twitter presence as big firms tend to react quick to complaints on social media. If you are on the flat rate, be aware that you choose the flat rate based on the dominant/majority of sales, so if you are importing both adult and children clothing, that tells me you are selling adult and children clothing. You can only use one flat rate percentage, so that is either 4% for children's clothing or "retail not listed elsewhere" at 7.5%. Assuming the majority of your sales are children, then all your sales are subject to 4% VAT rate, so just check you are comfortable with your child/adult mix of clothing.

You need to be satisfied the customer is "in business", the simplest method is if they have a VAT number, but different Countries have different VAT registration thresholds, like the UK's is £85k, so you could be in business in the UK but under the threshold for VAT but that doesn't mean you are now B2C, you are just under the VAT threshold for the UK. Where the customer is ABC Ltd or XYZ GmbH then it may be more obvious they are a business, but what about sole traders, so Chris Randall sole trader is no different to Chris Randall the person and this is where things are a bit more problematic, is Chris buying goods for his business or for his personal use? Also, a charity may be a legal entity/company but is it "in business", many charities are, but many charities don't make any sales and survive on donations alone and donations are not a business activity, So in the end it all becomes a bit of guess work which is why the guidance relies upon VAT numbers as VAT numbers are only issued to businesses who are "in business" and so VAT numbers trump everything else. With sole traders (or charities or even businesses with GmbH or equivalent to UK Ltd) you would still need to be satisfied they are a legit "in business", how you do that then presents another issue because if the customer is buying via an online portal, the only checks you can make are customers name, address and possibly which Country issued the credit card being used to make payment, so depends how clever your website is in sorting out a Chris Randall business owner from a Chris Randall member of the public or Chris Randall charity that is in business/not receiving donations..., so you'd probably just default to treating as B2C to be on the safe side/due to lack of sophistication in your website. Trust that makes sense. If you can collect other evidence to be satisfied the customer is in business, then you can treat as B2B, but how you collect that information is the issue (do you ask at the checkout the status of the customer and if they say they are a business, what checks do you make to confirm they are telling the truth?). https://www.gov.uk/guidance/vat-place-of-supply-of-services-notice-741a#sec6 para 2.4

Depends what you want to talk about as there are specific numbers for certain things, but the general VAT helpline is 0300 200 3700. https://www.gov.uk/government/organisations/hm-revenue-customs/contact/vat-enquiries

When it's added to the VAT group (date you specified on the application). Whilst the entity is not trading, it is still in the VAT group, although in reality if it is not trading then there will be no sales and no purchases and so whether you include or exclude the entity, it doesn't affect the group VAT return does it? But still, the entity is in the VAT group from the date it joined the VAT group, so you might as well start as you mean to go on and include the entity in the VAT group, else the risk is you exclude it for now and at some point the entity trades, nobody tells you and you end up excluding the transactions from the VAT group. As VAT groups are a bit tricky in terms of MTD compliance, I can understand why you'd want to exclude the non-trading entity for now, so if you do exclude the non-trading entity for now, use the time to figure out how you can generate VAT group returns whilst meeting the MTD compliance requirements.

You could make electronic payment (via your online bank) and make the payment to HMRC of what you owe. HMRC will receive the funds on time/before the 7th, but they will not know if what you have paid is the correct amount as you've not filed your return, so this will trigger a surcharge liability notice, the penalty is 0% if this is the first time you are late. Once you then file your VAT return via the software, HMRC will then see that you owe £x based on the VAT return you filed and that you did actually pay £x on the 6th/at the right time and so in fact you were not late, HMRC will then cancel the surcharge notice (not that it matters as was Nil penalty anyway) so you should not receive a penalty for this. There is also a new penalty system for VAT returns starting from January 2023 (so your return due tomorrow is for Sept-Nov and so falls under the old penalty regime). Details of the new regime are on your VAT government gateway, suggest you get up to speed on them as the new penalties are slightly more forgiving in situations like the one you find yourself in. I'm not familiar with Zoho Books, but in essence all MTD software needs your government gateway login details and can then "dial in" to the HMRC servers and transmit the VAT return values to HMRC's server.

If the Dublin based supplier has a valid UK VAT number, then you can reclaim VAT subject to the normal rules (ie, purchase is for the business and for a business purpose, you're not partially exempt, not business entertaining, etc). A non-UK business can obtain a UK VAT number, but where the non-UK business does not have an office or address or establishment in the UK, then these businesses are called "non-established taxable persons", in other words, they are not established in the UK but they are VAT registered in the UK. So their VAT number is legitimate, etc. A non-established taxable person (NETP) is always given the Aberdeen address by HMRC when a VAT number is issued, as that Aberdeen address was where the NETP unit was located within HMRC and the NETP unit dealt with non-UK VAT registrations.

Depends what services you are talking about. Northern Ireland is still in the United Kingdom (UK), so you would treat Northern Ireland the same as England/Scotland or Wales and charge UK VAT as usual. Sales to other EU Countries would usually fall under the place of supply of services rules and those rules usually move the VAT responsibility to the customer, but there are exceptions relating to land related/property related services, live performances/cultural events such as exhibitions and certain use and enjoyment rules. Link to guidance here :- https://www.gov.uk/guidance/vat-place-of-supply-of-services-notice-741a

Depends. If you can go back to your clients (B2B) , then treat the £1,200 as net and invoice customer for £240, but customer not obliged to pay, so ask them first. If you are a one man business with just 1-2 customers then it's easier to do this than if you are a large company with hundreds of clients. If you are not able to go back to your customer (B2C/retail or an unwilling B2B), then you can treat the £1,200 as net but you now owe £240 VAT to HMRC out of your own pocket...so it may be preferable to treat the £1,200 as gross (£1,000 net + £200 VAT)....this means the VAT element is coming from the payment you received from the customer not from you, but your turnover/sales for accounting purposes is reduced, your sale is now £1,000 plus VAT. Trust that makes sense. To many, it makes sense to treat the payment received as VAT inclusive (gross) else if you have to declare £240 VAT, this eats into your margin on the sale.