The VAT Controller postal address

We send correspondence to the Revenue and the VAT office by Special Delivery. Even when we do that, Royal Mail can still sometimes fail to deliver.

Whilst most VAT returns are submitted by us electronically, some still have to go in on paper. We posted 4 VAT returns by Special Delivery on 30 Jul 2009 within a guaranteed delivery date of 31 July 2009. If you were affected, the tracking number was ZW 2614 4011 7GB. The letter apparently arrived at the VAT Central Unit on 3 Aug 2009. We are still trying to resolve the fallout from that, and Royal Mail have refused the claim for the refund of the Special Delivery fee as (they say) the post code was wrong!

Having raised this with the VAT central unit, we will no longer use the address on the envelopes:

  • VAT Controller
  • VAT Central Unit
  • BX5 5AT

And, instead we will be using the full postal address (and recommend that you do the same):

  • HM Revenue & Customs VAT Controller
  • Accounts Office
  • Salts Mill Rd
  • Shipley
  • Bradford, BD98 1YY

Let’s see if that helps Royal Mail to do things properly.

Claiming back expenses from your own Limited Company

You may be familiar with this process if you have ever been employed and had to submit an expense claim. As a director of your own limited company the process is the same, and it applies where directors and employees have used personal cash or a personal bank card to pay for a business cost.

It’s better to have all your suppliers invoice your company directly, and have the company pay them directly. If that could be done, you would never have to fill out a personal expense claim form.

Keep the receipts for all of the things that you buy personally, on behalf of your business. Then once a month (or perhaps at some different interval) fill out a claim form and ask your company to reimburse you. If there is ever a records inspection by the tax office, they will want to see the claim forms with supporting receipts, and they will also check that the reimbursements on the company bank statements match the amounts claimed on the expense forms.

Motor expenses

Mileage on business journeys should be claimed at the HMRC approved rate. These have been the same since 6 Apr 2011.

• 45p per mile – first 10,000 miles per year
• 25p per mile – additional miles

No other motoring costs are to be claimed. The FPCS rates from HMRC are calculated by the AA so as to cover all the conceivable running costs of having a car! That means that you have to keep a log of all of your business journeys in your own car.

Foreign Currencies

Separate out any expense receipts which are in foreign currencies and prepare an individual claim form in each separate currency. That way the sub-totals do not end up with mixed currencies.

Non-VAT Registered Businesses

Use two forms, one form for mileage and just one form for all other business expenses. Separate the receipts by category and claim back the gross amount including VAT. Use the non-VAT form in the samples below, and just put all the figures on that.

VAT Registered Businesses

Separate your personal expense items according to whether they have VAT on them or not. VAT receipts for motor fuel belong in another separate pile. VAT on fuel can be reclaimed, but only to the extent that it is vouched for on actual VAT receipts.

Use three forms, one form for mileage and two separate forms covering expenses with VAT and expenses without VAT.  As a director/employee you are claiming back all of the gross amounts including all the VAT. The bookkeeper needs to know which items include VAT and which ones don’t. That’s why there are three different forms for a VAT registered business.

Book keeping and sample forms

If you are doing your own book keeping, use the totals at the foot of each column and post them into your software. To download a sample form (MS Excel) right click on the link and select “save as” . . .

• Mileage Claim
• Non-VAT Expenses
• VAT Expenses

Expenses in the first month or two

Normally a new business, will lead to cash expenses which you want to reclaim, before you have any funds to pay them. There are two ways to handle this dilemma.

• Wait until the business can afford to make the reimbursement.
• Introduce working capital (use a round sum) into the business, and then reimburse yourself!

Over the course of the financial year movements in capital introduced and capital withdrawn accumulate and may be shown in the annual accounts as a loan from the director to the company. Take care, because capital movements can sometimes work the other way. If you take too much capital out of the company, the loan is the other way around and there can be adverse tax consequences.

Recharging Costs to customers

Company’s do not claim from customers, they invoice.

Company’s are not reimbursed by customers, they have a receipt.

Reserve the expressions claim and reimburse for activities that occur between you (or your staff) and your company.

If your company recharges costs to a customer it is done on an invoice. The amounts recharged are usually liable to VAT. See the Disbursement or Expense report for more details of what may and may not be liable to VAT.

In a legal sense transactions between you and your company, and transactions between your company and your customers are entirely different obligations.

The terminology matters. This is one of the few situations where all accountants, bookkeepers and VAT officers need you to understand this concept fully.

Staff claim and staff are reimbursed.

Company’s do not claim from customers, they invoice.

Company’s are not reimbursed by customers, they have a receipt.

Company Dissolution

Once you have decided that a company is no longer needed, it can easily be dissolved. You must first ensure that the accounts and corporation tax return for the final period of trading have been submitted and that any tax liability has been paid.

If there is a tax repayment for the final year, you will want to have received that before you close the bank account and dissolve the company. If a company still has money in a bank account on the date of dissolution, you will forfeit that money and it is sent to the government’s Solicitor General. It is a nightmare to get a company reinstated and then recover money from the Solicitor General. So we recommend that you complete your finances first and only then, dissolve your company.

Do not close the company bank account until your tax affairs are settled!

Do close the company bank account before the dissolution form goes in!

If Proactive has prepared the accounts and tax return for the final period of trading then we will be in position to work on the dissolution for you. This normally involves a fee which might be waived in the simplest of cases.

If you want to do this yourself and have an account with Companies House then you can start the process here:

https://guidedfiling.companieshouse.gov.uk/start?t=DS01

The procedure has to allow for legal notices to be published in the London Gazette over a 3 month period. It normally takes around 4 months to have a company dissolved. Once the process has been started, no more forms should be sent to Companies House for this particular company, none whatsoever. If that happens, the dissolution process will be cancelled. You will need to start the whole thing again!

If you need further advice, please contact us.