1. VAT Registration Threshold.
1.1 The new mandatory registration threshold rose to £58,000 for 1 April 2004. The limit applies to both the value of taxable supplies in the last 12 months and the anticipated level of taxable supplies in the next thirty days.

1.2 From 1 April 2004, the de-registration limit for VAT increased to £56,000 applying to the anticipated level of supplies in the 12 months following application for deregistration.
2.
Annual Accounting Scheme
2.1 The limit of taxable supplies at which businesses may join the Annual Accounting Scheme rose to £660,000 with effect from 1 April 2004.

2.2 There is a special version of the scheme available to businesses with taxable supplies of no more than £150,000 in a year.

2.3 The point at which businesses currently using the scheme will have to cease using it rose to £825,000.
3.
Cash Accounting Scheme
3.1 The new limit at which businesses can join Cash Accounting is £660,000 taxable supplies from 1 April 2004.

3.2 Businesses may remain in the scheme until their supplies have reached £825.000.

3.3 For businesses leaving the Cash Accounting Scheme a new option will be introduced to allow the VAT outstanding on departure to be accounted for over a six month period rather than on the first Return after the scheme terminates, allowing outstanding debts to be cleared and therefore connecting to the VAT Bad Debt Relief.

3.4 If businesses are compulsorily removed from the Cash Accounting Scheme they will be required to account for all outstanding VAT at the date of departure.

4.
Fuel Scale Charges.
4.1 There is a reduction on average of 2.2% in petrol charges, and approximately 3.8% on diesel.

4.2 Quarterly fuel scale charges 2004/05 are:

7. Optional Flat Rate Scheme
7.1 Businesses with gross turnover of up toil 87,500 may join the scheme.

7.2 The scheme allows the calculation of a net output/input VAT amount for each quarter based on a standard percentage applied to the turnover of the business, including exempt supplies.
7.3 There are specific flat rates applicable to businesses.

7.4 Businesses will still issue proper VAT invoices to customers.

7.5 Under this scheme input VAT on any expenses including capital items costing individually £2,000 or less is foregone.

7.6 Capital items costing individually more than £2,000 including VAT may be dealt with outside the scheme i.e. VAT input tax is recovered and output tax accounted for separately on the disposal of the item.

7.7 Businesses unable to use the Flat Rate Scheme include second hand margin scheme traders, tour operators, those who in the previous twelve months have been assessed with a penalty for conducts involving dishonesty.

If you are interested in utilising the flat percentage scheme then please contact us and we will advise and calculate whether it is beneficial for you.

Bad Debts Relief
8 8.1 Bad Debt relief can be claimed if a customer has not paid within six months of the date of supply, or due date for payment, if later.

8.2 It is no longer necessary to notify the customer that Bad Debt relief has been claimed.

8.3 However, the trader who has reclaimed the input tax on an invoice must account for that input tax to Customs if the supplier has not been paid for the goods or services within six months of the date of supply, or due date for payment, if later. The input tax figure is to be reduced on the traders next VAT Return.

VAT Recovery on Fuel Mileage Rates
9. 9.1 The Inland Revenue have published suggested fuel only rates to be used by Employers wishing to exclude the benefits in kind on free fuel. Rates differ according to engine size and fuel type of the company car.

9.2 Customs have announced they will accept these rates for VAT purposes. Input VAT can therefore be reclaimed on the following gross fuel payments:

10. Electronic Supplies
10.1 New rules applied on 1 July 2003 affecting all supplies of electronic services.

10.2 Under the changes radio and TV broadcasting services, and digitise products will normally be supplied in the country where the customer belongs. This will affect non-EU businesses. It is necessary to register and charge VAT in member states where they supply private individuals and non-business organisations.