Visit google

Google Reviews


Top Priorities When Preparing for Tax Due Diligence

Tax can seem like one of the most complicated bits of your business and tax due diligence is no different. It’s the process of gathering information about your company’s tax affairs to make sure it’s compliant with current tax laws. It’s also a critical part of any business’s risk management assessment and helps spot and reduce any potential tax risks.

Preparation is always the key when preparing for a company’s tax due diligence. There are some steps you can take to make it more straightforward, such as:  

  • Understand the tax laws. The first step is to understand the relevant company tax laws in the UK. This includes the different types of taxes that businesses are subject to and the rules and regulations governing these taxes.
  • Gather all relevant documentation. Make sure you gather all documentation relating to your company’s tax affairs, including tax returns, invoices, contracts and bank statements.
  • Identify any potential risks. Once you have all the relevant documentation together, take the time to identify any potential risks in your tax affairs, for example, errors on tax returns, unreported income or improper deductions.
  • Take steps to mitigate any risks. Once you’ve spotted any potential risks, do something to stop them. This may involve amending tax returns, paying back unreported income or correcting improper deductions.
  • Have a plan in place. It’s important to have a plan in place in case there’s an audit. Your plan should include who’s responsible for responding to the audit, what documentation you’ll need to provide and how you’ll address any findings.

By following these steps, you can prepare your business for the tax due diligence process in the UK and make sure you’re compliant with the tax laws. If you’re uncomfortable with the tax due diligence process, always seek professional help. We’re here to make the complicated clearer and the overwhelming accessible when it comes to tax, so get in touch with our team today. 

Visit google

Google Reviews


Domestic Reverse Charge VAT for Construction Services Explained

Just what the world needs – more types of tax. The Domestic Reverse Charge (DRC) for construction services is a tax change that came into effect on 1 March 2021. The DRC applies to businesses that supply construction services to other businesses, which means they cannot charge VAT on those supplies anymore. Instead, the person or business that has received the construction services is now responsible for accounting for the VAT. So the customer rather than the supplier is liable to account for and pay the VAT to HMRC.

Who does the DRC apply to?

The VAT domestic reverse charge must be used for most supplies of building and construction services and applies to standard and reduced rate VAT services for businesses who are registered for VAT in the UK and reported within the Construction Industry Scheme.

How to comply with DRC

If you’re a supplier of construction services, you not only need to know about the DRC, but make sure you’re on the right side of the law to keep the HMRC happy and avoid incurring a penalty. 

Here are our tips to help you comply with the DRC:

  • Identify your customers. Make sure you know which of your customers are VAT-registered businesses.
  • Check your invoices. Check that your invoices do not include VAT for construction services supplied to VAT-registered businesses.
  • Register for the DRC. If you’re not already registered for the DRC, you must do so. You can register online at GOV.UK.
  • Keep records. Keep records of all the construction services you supply to VAT-registered businesses. They should include the date and value of the supply and the customer’s VAT registration number.

Extra tips for complying with DRC

Here are some more helpful tips if you’re affected by the DRC:

  • Talk to your accountant. If you’re unsure how the DRC will affect your business, talk to your accountant. They’ll be able to help you understand the changes and make sure you’re compliant.
  • Use accounting software. Accounting software helps you to keep track of your VAT transactions and ensures that you’re correctly accounting for the DRC.
  • Be prepared for challenges. The DRC is a complex change, and it may take time for businesses to adjust. Be prepared for some initial challenges, and be patient as you work through them.

By following these tips, you can make sure the transition to the DRC is as smooth as possible and that you’re compliant and keep the HMRC and their fines at bay.