Vat, personal adjustments etc

[fermerboy]

We are a typical family farm, a couple of neighbouring farms, two houses etc.
The farm pays the bills including household electricity, kerosene for heating, phone bills, broadband, house repairs etc.

What Im interested in is what percentage of the Vat you guys claim back off of things like phone, mobile and electricity as obviously there is a mix of business and personal use.
Ive done the maths on fuel for the car and pickup and dont bother claiming any back on that as thats the best option for us there.

I have discussed this with my accountant but I seem to have a different view to them so really interested in what % others are claiming.
Ideally we'd claim everything back but realistically it needs to stand up in a vat inspection.
Tia.
FB

 

[4course]

my understanding is that your accountant will be working off established guidelines which can be challenged but will cost more than you will save and certainly expose you to more frequent tax/customs inspections from the authorities .In other words more bother than its worth

 

[Highland Mule]

Phone, broadband 70%
mobile through my other company, 100%

But agreed with 4course - I go with what the accountant says.

 

[fermerboy]

My accountants comment of 'go with what you'd be happy defending to the vat inspector' when first asked left a bit too much of grey area for my liking.

 

[Goweresque]

On accountants advice I claim 25% of phone and broadband VAT and 10% of heating and light VAT. Some years ago I was inspected and the inspector had no issues with that.

 

[DrWazzock]

Claim too much and they will want to see records justifying it.

 

[Chae1]

My accountants comment of 'go with what you'd be happy defending to the vat inspector' when first asked left a bit too much of grey area for my liking.

Are your accountants JC?

 

[4course]

Had a vat inspection a few years ago and chap asked to see the bills from the local merchant who along with wellies and working overalls etc sold shirts and in my case insp picked up that I had claimed the vat back on a sports jacket . Much discussion took place as to my saying it was workwear as needed it to go to ag meetings shows technical events etc and as it became grubby would end up as a market jacket before finally worn up as a jacket on the farm. He would still not budge eventually as he was a bloke of a similar age to me at the time said do you when you go to the pub wear a sports jacket ,no he said ,nor do I was the response .This conversation continued in the end must have taken up a good 20 mins At which point he said he needed to be away to another appointment but couldnt let me have the vat amount ,so I reluctantly agreed he left happy I paid about a fiver , money well spent !!

 

[Suffolk Serf]

It helps a lot if the farm office is part of the house.

 

[Mc115reed]

60% fuel 75% phone 25% broadband and I don’t bother with electric and gas as would be about £2 [emoji23]

 

[Highland Mule]

Are your accountants JC?

Mine are.

 

[fermerboy]

Are your accountants JC?

Yes, That obvious?

 

[Chae1]

Yep!

They don't seem to be comfortable working in the grey area.

We left them a couple of years ago.

 

[Top Tip.]

They don't seem to be comfortable working in the grey area.

We left them a couple of years ago.

I’ve just left them as well. Is there a theme developing here?

 

[Doc]

I am currently undergoing a VAT inspection. If the office is in the farm house and electric is at a single meter for farm and house then you can claim up to 75% of the VAT. The apportionment just has to be justifiable to your circumstances. They have pulled me up on this. It looks like I will owe them about £4 per quarter for 4 years. They have picked up a couple of other anomalies. I’ve left my accountant to be the point of contact and all correspondence is via her. I am insured for HMRC investigation.
It seems a lot of time and effort is going into microscopic analysis of what is a small, part time business. I pay plenty of tax on my other business interests and have a conservative accountant.They are likely to recoup a very small fraction of what it will cost to determine this and I can’t help thinking they are wasting government funds here which could be better spent elsewhere. I’d be happy just to pay a reasonable estimate for any oversight and they could move onto more fertile ground.

 

[Tarw Coch]

I am currently undergoing a VAT inspection. If the office is in the farm house and electric is at a single meter for farm and house then you can claim up to 75% of the VAT. The apportionment just has to be justifiable to your circumstances.

That doesn’t sound very good for a farm that uses a lot of electric, I would imagine on some farms the farm will use well in excess of 90% of the electric

 

[neilo]

I must be a saddo. I rarely use my mobile to speak to anyone that doesn’t have at least some connection with agriculture.

 

[Tarw Coch]

I must be a saddo. I rarely use my mobile to speak to anyone that doesn’t have at least some connection with agriculture.

Just had a scroll through my call log and can’t find one call not linked to farming, I wouldn’t go as far as to say every second of every call was purely buisness though

 

[Doc]

I would also agree that for some power hungry enterprises like dairy it could be low but for outdoor sheep only it would be generous. I don’t think they know the difference and VAT inspector seems clueless about farming generally. She couldn’t understand why I didn’t have consistent monthly sales ( I’m small scale fat lambs and store cattle) or why a trailer I bought 3 years ago only cost £1200. She thought it would be £12000. I think she thinks we are all Adam Henson.

 

[Tarw Coch]

I would also agree that for some power hungry enterprises like dairy it could be low but for outdoor sheep only it would be generous. I don’t think they know the difference and VAT inspector seems clueless about farming generally. She couldn’t understand why I didn’t have consistent monthly sales ( I’m small scale fat lambs and store cattle) or why a trailer I bought 3 years ago only cost £1200. She thought it would be £12000. I think she thinks we are all Adam Henson.

Without some basic knowledge of how farming works, not only could they waste time and money looking for problems where they don’t exist, they could just as easily let some things slip that they shouldn’t..