1. Is there VAT on insurance ? No there is not. You will be charged Insurance Premium Tax but this is not VAT and cannot be claimed back
2. Can I claim the VAT on Cars ? No unless you are a car dealer, car hire company, driving school or taxi firm. VAT on vans and pickups can be claimed back if used in your business.
3. Can I claim VAT back on business entertaining ? No you cannot unless it entertaining your staff
4. Is there VAT on rent ? This is a complex area, but on residential properties the answer is no. Business properties is more complex so the answer is maybe ?
5. Can I claim VAT on personal expenses ? No VAT can only be claimed on business expenses.
6. Are zero rated and exempt the same ? No zero rated items such as food (not hot food), medicines and children’s clothes are subject to VAT but at zero percent. These would form part of your turnover for VAT purposes. Exempt items are things like insurance, bank interest, wages which do not fall into the VAT regime.
7. Is VAT on property and building simple ? The answer is a resounding no ! This is the most complex area of VAT and it is dangerous to make any assumptions. Always take specialist advice.
8. Do I have to keep all my invoices and receipts ? Yes you do. Why not use software like Quickbooks or Xero and scan your receipts. This is fine for HMRC and your accountant.
9. I am exporting goods, do I charge VAT. The simple answer is no this is zero rated. Your customer will deal with the VAT in their own country. Again this is a very complex area where further advice may be needed.
10. Do Charities pay VAT ? The answer in most cases is yes, there are specific exemptions in relation to some fund raising and special concessions on buildings. This is another area where advice is a good idea.