SCAFFOLDING - WHAT GOES UP MUST COME DOWN - OR SHOULD IT?
"HMRC's VAT Scaffolding Team" do their thing!
Don't get "kerplunked" by the rules on VAT on supplies to New-Build customers
As you are probably aware by now HMRC won a tribunal, the lowest level of court decision that:
(i) All supplies of scaffolding include an element of hire.
(ii) VAT at 20% is chargeable on the hire element of supplies even to “new-build” customers.
Now HMRC could have taken it upon themselves to write to scaffolders to warn them to set their houses in order, to charge VAT at standard rate on scaffold hire supplied to new-build customers, but they didn’t. What they have done is set up a “Team” to open investigations on scaffolders and claim “underpaid” VAT going back 4 years!
We have had some success in using business economics to “prove” that the hire element is much lower than HMRC presume and in crediting old “erroneous” invoices and reissuing corrected invoices to claim the VAT back. In most cases your customers can and will claim the VAT back, and pay you the VAT that HMRC customs now want.
HMRC’s whole response depends upon scaffolders paying over the “new” VAT as though it is a fine. We strongly recommend that:
(i) If you are under investigation the net cost to you should be minimum.
(ii) If you are not yet under investigation you get your house in order immediately.
We can help with this.
If you would like Hornbeam to assist you avoid this most unfair of situations created by HMRC please call Phil or Chris on 01603 720424.