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Christmas VAT shock

17 December 2008 / Neil Warren
Issue: 4187 / Categories: Comment & Analysis , VAT
NEIL WARREN tells a festive tale about how it all went wrong for Ebenezer Scrooge

KEY POINTS

  • Ideas for VAT free Christmas presents.
  • Non-profit making businesses.
  • Mixed supplies and VAT.
  • EU supplies and the turnover tests.
  • A penalty warning.

This Christmas will be special. Ebenezer Scrooge has vowed that all of his festive spending will be free from VAT – a welcome 15% saving on his Budget forecasts.

As he sat contentedly by the glowing log fire in his immaculate Victorian cottage the tight-fisted man pondered his strategy. He was a good VAT planner – and had always managed to keep the annual turnover from his consultancy business £1 under the registration limits.

‘Now let me see ’ he mused as he put on his best thinking hat ‘does it make any difference if I buy things that are zero-rated or exempt? Probably not ...

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