I know they often come in for criticism, but I have nothing but praise for my VAT investigation of many years ago.
In my line of retail, with a number of outlets, I would buy in bulk, literally tons at a time, and break the product down to sell in much smaller quantities. These products, several lines of which were VAT free, had a much larger profit margin than other stock lines.
I used to work out the % of vat/ non vat purchases, and pay VAT on that same percentage at retail value. As my line of work was open to abuse ( people were known to pay cash at a wholesaler, dispense with paperwork, and pocket the total sale proceeds) I had two VAT inspectors spend a week with me going through my accounting procedures...each business had its own set of book keeping accounts.
Once they’d studied margins, they advised me to breakdown the retail value of non VAT purchases, and subtract that from the total retail sales figure. And it could be backdated a number of years.
My VAT refund, which took me 3 whole days to do, bought me a nice new VW Transporter !
Lovely helpful people
|
