Scheme differences

04 February 2009

Issue: 4192 / Categories: Forum & Feedback , VAT

The VAT flat rate scheme includes ‘other business services’ and ‘activities not listed elsewhere’. What is the difference between these categories and what are the implications if the wrong category is chosen?

I am curious as to the difference between two business categories under the VAT fixed rate scheme these being ‘other business services’ and ‘activities not listed elsewhere’.

In particular I have two clients who are considering joining the scheme and want to ensure that they do not start out on the wrong foot. One is a sound engineer (advising on the installation of sound systems into business premises); the other is a self-employed barrister’s clerk.

Both can be said to be providing their services to other businesses. However is that the correct test? The HMRC website seems to include as ‘other business activities’ such activities that could just as easily be provided to non-business clients.

Suppose that my clients chose a category that HMRC subsequently disputed. What would be the possible downsides and could this be argued before the VAT tribunal if necessary?

Readers’ advice would...

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