Top 10 Common VAT errors

We asked our team what the 10 most common VAT errors found as part of our VAT Return Service were.

  1. VAT incorrectly reclaimed on travel such as Air Fares, Train Tickets or Taxis (there is none!)
  2. Not applying the Fuel Scale Charge where a business is reclaiming input VAT on fuel
  3. VAT incorrectly claimed when entertaining clients
  4. VAT not reported on deposits or payments received in advance
  5. Reclaiming VAT input tax where there is no purchase invoice
  6. Zero rating VAT on sales made to EU Customers where you don’t have the customers VAT registration number from their own country
  7. VAT incorrectly claimed on Insurance and Business Rates (there is none!)
  8. Reclaiming VAT where there is private use, such as private telephone calls or home telephone lines
  9. Not accounting for VAT when you sell a business asset such as a computer or office furniture
  10. Not applying the 50% VAT input restriction on company car leases

Making VAT errors can often lead to penalties from HMRC. To arrange a free consultation to discuss any area of VAT just email or call our team on 0131 220 0152.

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We are a team of award winning Chartered Management Accountants based in Edinburgh. We are cloud accounting and tax specialists helping businesses and contractors in the technology and food & drink sectors across Edinburgh and the Lothians. Your Tech-Savvy Edinburgh Accountants since 2007.