Frequently Asked Questions – Relevant to VAT Health Check up Services for Partial Exempt Businesses;

VAT health check up is a very simple process through which our experts using very sophisticated auditing techniques spot for material compliance & book keeping errors. The process requires minimal support from your accounting team and fully determines the true health state of your VAT records. We will of course share the results of this health check up with yourself and based on our past experience majority of the companies discovers a refund due from HMRC as a result of our health check up.

VAT registration for private medical companies including NHS GP surgeries is recommended as they incur a lot of VAT on their purchases. Registering for VAT provides them with an opportunity to recover back significant amount of VAT they pay to their suppliers. This finally results in reduction of this nonproductive expense of non-recoverable VAT and provides a positive enhancement to cash flows of the business.

Although this has never happened to date – as the HMRC performs all its procedures, inspections and checks before releasing the repayments but in an unlikely event of this happening we will refund 100 % of our fee in addition to any penalties and interest HMRC may demand because of our work.

Our Professional Fee only becomes due and payable once the refund lands in our client’s bank account. We only charge once our client gets benefit from our services otherwise we do not charge even a single penny.

HMRC is a highly professional organization that deals with each situation on its merits. First of all we will not send in any refund claim which is likely to get rejected by HMRC but even if the claim fails to succeed even then you will not end up being in bad book of the tax man.

Our initial review is always free of charge and non obligatory in which we let the customer know regarding their current VAT situation and whether there is any likelihood of a refund from HMRC. It’s up to the customer after that whether they want to go ahead or not.

Our Past Experience suggests that small VAT bills have ended up in negative VAT bills in the past ( instead of paying HMRC small amounts clients have ended up in receiving refunds) so its always a win situation for the client.

It is a common misconception that VAT registration will make it mandatory to add VAT on top of the sales prices which will result in an increased prices for customers.  In reality even after VAT registration more than 97 % of the sales still remains outside the scope of VAT in case of a medical company. This means that you do not have to charge VAT on top of your sales prices for 98 % of the services you provide hence remaining competitive. Only 2 percent of the sales attract VAT which the business can absorb without passing the same to the customers.

We have many clients who were advised by their respective accountants not to opt for VAT registration or they were not eligible for VAT registration because of not making enough taxable supplies but we got them registered for VAT and they ended up in a decent amount of cash from HMRC, nevertheless still benefiting from positive cash flows which will continue as long as the business remains Active.

Our services are for both VAT registered as well as VAT non registered business. We perform a Free VAT health checkup and if as a result of the check up we find out that the company is likely to get a refund then we apply for back dated VAT registration going up until last 4   years. Our Past experience suggests that non VAT registered businesses ends up in higher refunds then businesses already VAT registered.

The biggest benefit of registering for VAT is cost savings and positive impact on future cash flows as explained above. In addition to this there are many minor non-monetary benefits for registering for VAT such as improving the perception of your business as companies are more comfortable in dealing with VAT registered business.

There is absolutely no disadvantage to register for VAT in general but within are health check up we will make sure that VAT registration does not put the business in a disadvantageous tax position.

Once a business is registered for VAT then it purely depends upon the business individual situation that determines which services will attract standard rated VAT at 20 %. Through the complementary VAT health checkup process we determine the services which will attract standard rated VAT at 20 % after the business registers for VAT however based on our prior experience the percentage of sales which will attract 20 % VAT will not be more than 5 %. Also the extra VAT costs never get passed to the patients as we always advise the business to absorb these extra costs itself. Despite absorbing these extra costs the VAT recovered from HMRC will be significantly more than the extra costs (VAT Payable) therefore the business does not have to change the prices of goods and services it offers.

Summarizing your customers will not have to pay even a penny extra in terms of goods and services bought after you receive your VAT registration.

This depends upon the business individual circumstances but overall through VAT registration you should be able to reclaim 10 % to 55 % of VAT the business pays to its suppliers while purchasing goods and services.

Once we complete the initial refund process that involves computation of our numbers and their extensive auditing by HMRC we then pass over the detailed protocols agreed with HMRC to the business in the form of a manual that clearly explains how the future VAT returns should be managed and compiled. However as this area experiences frequent changes in the rules so it will be the responsibility of the business to update the manual by keeping a close eye on every time there is a change within VAT rules. This is one reason our clients prefer to retain our services for future VAT filings as well in order to ensure that their future VAT returns are in compliance with the latest VAT rules and regulations.