Rodolfo Basilio No Comments

‘HMRC’ tax refund fraud: beware of phishing emails

Fake ‘HMRC’ tax refund emails are once again flooding inboxes. We’ll show you how to spot a fake tax rebate email.

According to Wikipedia, “Phishing is the attempt to obtain sensitive information such as usernames, passwords, and credit card details (and money), often for malicious reasons, by disguising as a trustworthy entity in an electronic communication“.

And the time when bogus emails were poorly designed and easily spotted is coming to an end. In a tax rebate scam spotted by our Senior Accountant in early March 2018, not only the letter attached is almost free of the common silly mistakes, but a website created as an almost perfect copy of the HMRC is jaw dropping.

Read more

Rodolfo Basilio No Comments

What is VAT?

The basics of VAT

Value Added Tax (VAT) is a widely used term in the business world, but a few people understand how it works or where it is applicable. In simple terms, VAT is a consumption tax levied on the sales of products or services. It is termed as an indirect tax since businesses collect it on behalf of the government. Since its inception in 1973, VAT rates have changed over the years, and fair to say it’s either gone higher or lower depending on governments priorities, laws as well as changes in the economy.

As a business owner, you need to include VAT in the price of your goods or services, keep proper VAT records and pay the collected VAT to HMRC. The prices marked on items in-stores are VAT inclusive. However, some goods and services for instance dental services are exempted from VAT, while other activities are outside the VAT scope, e.g. hobbies. If you live outside the UK or you are a visitor in the UK, you may get a reimbursement of VAT paid on goods and services.


VAT Rates

There are three types of VAT rates in the UK, they include:

  • Standard VAT rates – Currently 20%
  • Reduced VAT rates – 5%
  • Zero VAT rates – 0%

The customary rate of VAT increased from 17.5% in 2011 to 20% currently. Furthermore, the customary VATrate applies to most goods and services unless the particular goods or services are exempted from a VAT or deemed out of VAT scope.

Reduced VAT rate (5%) depends on the type of item sold or the circumstances surrounding the sale. Such items include:

  • Children’s car seats
  • Domestic fuel or energy costs
  • Mobility aids for older people (for individuals over the age of 60)

Zero rate VAT implies that the goods and services are within the VAT scope (taxable), but rate chargeable to customers is 0%. You have to include such products or services in your VAT records and file them in your VAT returns. These include;

  • Books and newspaper
  • Children’s shoes and clothes
  • Motorcycle safety gears.
  • Most of the goods exported to non-EU countries
  • Goods supplied to an EU VAT registered business
  • Energy-saving home installations
  • Public transport fare
  • Sanitary protection such as pads and tampons
  • Basic or staple food items except for meals in a restaurants or takeaways
  • Some goods provided under special circumstances like equipment for the disabled (vehicles, grab stairs or stairs lift)

These rates are subject to change and in case of any changes; you must affect the changes by configuring your POS on the date of such changes. Medical services and products supplied on health reasons, postage stamps as well as financial and property transactions are exempted from VAT including and should not be included in the VAT records. Furthermore, some goods and services such as legal fees, e.g. congestion charge and vehicle MoT tests are deemed to be outside the VAT scope.


Who Pays and How to Pay VAT

Any business within the UK with gross revenue of above £85,000, the VAT revenue threshold has to register to pay and charge VAT on their goods and services. Business with revenue below this threshold or start-ups may register for VAT on their own will. All the collected VAT must be paid to the HMRC while you are filing the VAT return.

HMRC accepts VAT payment in some payment methods including Faster Payments – online or mobile payment, CHAPS –Online form or direct debit, Credit Cards and BACS among other methods.


Have more questions about VAT or general business accounting?

Great, speak to Vertice Services, we are a reputable accounting firm in the UK focused on helping SMEs like yourself make sense of your accounting stuff. We can advise, manage your accounts, organise your bookkeeping, file to HMRC and of course, do a lot more. Speak to one of our certified accountants today to see how we can help you.

Rodolfo Basilio No Comments

Budget 2017

On 22nd November 2017, the Chancellor Philip Hammond delivered the Autumn Budget 2017. Mr. Hammond tried to send a positive message during his Budget speech, but his announcements particularly did not convince ordinary people who have been affected by Brexit long period of uncertainty. Any product or service being sold in UK is becoming more expensive and people are felling in their wallet.

In the last decade, I have read and studied many UK Budgets and this one is the worst budget ever. Mr. Philip Hammond forgot about the pensioners, the students and the hard workers. He also forgot about the business people. Business people who are the individuals responsible to create employment and innovation to this country. They are the risk takers.

Mr. Philip Hammond tried to hide UK terrible Economy indicators and has not spoken enough about what the Government will practically do to improve its Economic situation. For the first time in my life, I can say that they were only losers in this Budget.

Read more

Rodolfo Basilio No Comments

What is expected from the new generation of accountants?

No-one can be expected to predict the future – but as tech-savvy human beings, we must always keep up to date with the pace of technology. We must constantly evolve as quickly as we can to avoid being left behind. Managing a business is no different: being behind means being out of business. Read more

Rodolfo Basilio No Comments

How much do you need to start up your business?

In my opinion, lack of funding is the main reason many startup businesses fail or do not even start trading. I have seen many potentially successful businesses in financial difficulty because the entrepreneur did not calculate how much money was needed to set up the business and keep the business trading, especially in the first year. I always advise my clients to prepare the following documents before they start up: a simple start up table, a profit/loss forecast and a cash flow statement forecast to calculate the total business investment needed and the total working capital. I am not going to explain in detail how to prepare the financial statements now as I would like to concentrate on calculating the total figure the entrepreneur should have in mind before committing himself to open the doors of his business without risking a financial disaster. Let’s start with the startup table.

Read more