Managing Business Finances Since 2015

Our Value Added Services


Tax

Tax Advice and Returns Including Corporation Tax, VAT, Capital Gains and Many Others.

Accounts

Business Accounts Services Including Annual Accounts, Forecasting, Company Valuations and More.

Audits

Statutory Audits, Client Money Audits, Grant Expenditure Reports and Independent Examinations.

People

Personal Tax, Returns & Planning

Businesses

Small & Medium Enterprises

Groups

Clubs & Registered Charities

Entrepreneurs

Consultants and Self-Employed

Client's Feedback

What People Say


Our latest blog posts

News And Updates


The VAT concept of business

The VAT system is policed by HMRC and there can be heavy penalties for breaches of the legislation.

There are four conditions that must be satisfied in order for an activity to be within the scope of UK VAT.

These conditions are that the activity:

  1. is a supply of goods or services
  2. that the supply takes place in the UK
  3. is made by a taxable person
  4. is made in the course or furtherance of any business carried on or to be carried on by that person

The fourth point above is a condition that needs to be considered when deciding whether an activity is within the scope of VAT. This concept of business is one of the less well-known rules. However, it is an important condition that decides if a business must charge VAT on their sales, known as output VAT and on its ability to recover VAT, known as input tax.

The VAT concept of business is taken to be the same as the concept of 'economic activity' set out in European legislation. Therefore, if an activity falls within EU definition of economic activity it must be business in the UK. Both of these definitions are wide and, in some cases, have needed to be interpreted by the courts.

What is domicile?

Domicile is a general legal concept which in basic terms is taken to mean the country where you permanently belong. However, determining domicile status can be complex. In fact, HMRC guidance states that domicile cannot be defined precisely, but the concept rests on various basic principles.

  • Every individual must have a domicile at all times. The law ascribes a domicile to those individuals it regards as lacking capacity to choose one.
  • An individual cannot have more than one domicile at the same time for the same purpose.
  • An existing domicile is presumed to continue until it is proven that a new domicile has been acquired.

Your first domicile, known as a domicile of origin, is based on that of your parents, usually your father. Your domicile will only change if you acquire a new domicile of choice. To do this, you usually have to move to another country and establish a permanent intention to remain there.

Although domicile can change, there is generally a presumption in favour of the continuation of an existing domicile. To change a domicile, lots of factors are taken into account for example, the location family, property and business interests. This issues that need to be considered are one of the primary reasons that many of these complex cases end up with the courts having to determine the issue.

It is also possible in certain circumstances for an individual to have two domiciles although this is unusual. There is also a concept in the UK of deemed domicile – under new rules introduced from 6 April 2017, any person who has been resident in the UK for more than 15 of the previous 20 years will be deemed to be domiciled in the UK for tax purposes.