VAT deregistration on death

An older accountant told me what happened to a client after they had died.

The accountant had notified HMRC of the death and deregistered the client from VAT.

Imagine the accountant's surprise to then receive been told nby the client's widow of a follow up letter sent to her deceased husband.

The VAT office letter said: 

"We are sorry to learn of your recent demise. We have processed your request for deregistration but if at any time in the future you become liable to be VAT registered again, you should apply to this office for a new VAT number."

Private Eye discloses leaked Budget plans

A recent issue of Private Eye included a short piece titled: "Osborne's Next Budget Plans leaked".  It included:

20% VAT introduced on: 
- Raindrops on roses
- Whiskers on kittens

VAT increases on:
- Bright copper kettles
- Warm woollen mittens
- Brown paper packages (extra if tied up with string)

The VAT ditty

A story about this video caught my eye in the paper today. Thought I'd share it more widely as it's very well written.

VAT a daft idea for a builder taking cash in hand

Years ago, I lived literally a block down the road from the local VAT office. I got some quotes for a new driveway, and the best price by far was from a well-known local firm who gave me a double discount: one for paying cash (nudge nudge, wink wink, mind the VAT, know what I mean guv'nor), and one for putting their sign up to let the world know who did the work. Including, I suppose, the local VAT-man!

Story related by Andrew Horder

No VAT increase on lapdances

Sign seen outside a 'gentlemens' club on Piccadilly Circus, London

Given that VAT went up 4 months ago it would seem that the world of lapdancing is struggling to attract punters....

Longer new year's eve parties thanks to VAT rate change

Spare a thought for the pubs and clubs that will remain open beyond midnight on 31 December when the VAT rate reverts to 17.5%.

Will it be necessary to issue two VAT invoices? One charging VAT at 15% for goods and services provided before midnight and another at 17.5% for those provided later into the night after the rate changes? Can you imagine the mayhem - and the unwelcome sight of barmen running around trying to issue valid VAT invoices mid-party?

It seems that the Government wants to avoid spoiling parties in this way as the Financial Secretary to the Treasury announced in May that:

"HMRC will allow a few hours’ trading grace in which [pubs and clubs] may continue charging the 15 per cent. rate for a session that goes into the early hours of 1 January."

So expect some parties to continue well into the morning of New Year's day. If you attend one, do sing a vote of thanks to the Government for giving you an excuse to party longer.

And what chance the necessary VAT rate changes will be made correctly later when everyone's suffering from their hangovers? Ok, maybe it won't be so much fun after all.

My thanks to Mike Thexton for drawing this to my attention.

I wrote a more serious piece about the VAT nightmare before Xmas, that is now looming, shortly after the VAT rate changes were announced.

What else can a man's razor do?

Radio 4's That Mitchell and Webb Sound recently featured a sketch about a typically overblown razor ad for the Accelerator 12-Blade:

'The first blade shaves you close.

'The second blade shaves you closer still.

'The third blade sets up your internet banking.

'The fourth blade shaves you closer still.

'The fifth blade does your VAT receipts and puts them in an office file, not a shoebox.

'The sixth blade...'

My thanks to Daniel at Taxation magazine for bringing this to my attention.

Neil has plenty to smile about

I met Neil Warren at the ICAEW Wyman debate last week and complimented him on his beaming smile. He explained that he has plenty to smile about as he supports Manchester United, Sussex County Cricket Club and he talks about VAT.

Somehow I doubt there are any other football and cricket fans who share that last passion.

VAT cut did put more money in our pockets - literally

When Alistair Darling lowered the rate of VAT last year he promised it would put more money into people's pockets.

According to the Daily Telegraph today this prediction has come to pass, quite literally. As a result, the extra coins that we now receive in change are wearing away at our pockets. And this is good news for dry cleaners and seamstresses who are being asked to sew up the holes!

And to think I predicted on my TaxBuzz blog that the VAT changes will HURT small businesses!

Tax funnies picked up from twitter

What does VAT stand for? VAT = [V]ery [A]nnoying [T]ax. What else did you expect?
Thanks to Matt Chatterley (@matchedit)

Spent 25 min waiting for Atlanta business tax office to answer phone. Would be nice if their hold message said THEY'RE CLOSED ON FRIDAY!
Poor Paul Mckibben (@paulmckibben)

Have just learnt that the Russian government have cut the tax on vodka to help their citizens ease the pain of financial doom. So clever.
(@justcookit.co.uk)

I'm hoping my tax return allows me to get a new bike
Thanks to Daniel Versola (@danielversola)

I just did my first tax return! It was fun! :)
(@ursalaura)

This ouija board is clearly defective. Either that or lost receipts don't have souls. My accountant will not be happy...
(@Badwisdom)

OK - well I found them funny. Let me know if you find anything better!

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Remember the VAT rate when you hit 50

Not to everyone's style and too late for me but when you hit age fifty you could claim:

"I'm not 50, I'm 43 plus VAT"

When VAT goes back up to 17.5%, 50 yr olds will be 42 plus VAT!

I suppose you could try a similar approach if caught speeding at anything upto 15% above the limit, but I wouldn't recommend it!

VAT and Fiddle

What a name for a pub! Seen in Nottingham.

And when I checked it out on the web I found there's also a wine bar of the same name in Paignton, Devon.

Doing your VAT return is like being a stripper in an empty room

Full marks to Times columnist Libby Purves for what I think is probably the best commentary on the pointless VAT rate change announced in the PBR.

Here are just a few of her choice remarks:

• The VAT reduction is the final provocation. It is a stupid tax anyway, visibly inferior to the simple old purchase tax.
• I am an unpaid and irritable tax collector, yet of very little help to the Exchequer. It is like being a stripper in an empty room: a terrible waste of sequins and effort.
• But the absurd and temporary 2.5 per cent reduction puts the tin lid on it. It is the silliest gesture since Harold Wilson banged double VAT on yacht equipment to annoy Ted Heath.

Do prostitutes charge VAT?

Back in 2002 a High Court judge ruled that the VATman is perfectly entitled to pursue prostitutes. Mr Justice Jacob decided that members of the world's oldest profession should not be allowed to exploit a loophole because of their illegal activities and avoid paying VAT.

The case followed an earlier VAT tribunal ruling that an escort agency was unlawful and therefore could not be taxed.

The tribunal said the business "consists wholly, or at least very substantially, of the procurement of women for the purposes of their becoming common prostitutes".

When the tribunal found that the agency was "straightforwardly criminal", it meant that Customs and Excise could not claim VAT.

The owners had always claimed their business was lawful but said their turnover was below the threshold for VAT. But the judge overturned the ruling. He said: "I conclude that this case is not within the very narrow rules which allow moral scruple by a paradox to reward criminality by exempting it from taxation."

Under EU harmonisation of taxation, VAT is payable on a wide range of services without any difference being drawn over whether it is legal or illegal. Only drug dealing and counterfeit money apparently escape being taxed.

What would you search for?

I recently celebrated the first 'half-birthday' of the launch of the Tax Advice Network. I noted that over the first 6 months since launch thousands of searches have been performed on the site;

Perhaps the strangest search term was 'VAT on colonic irrigation'!