Global Accounting is designed to ease the burden of calculating VAT on goods bought for less than £500 and it is widely used by dealers at fairgrounds. Dealers who use this system will also have to include a ‘fuller description’ of goods on invoice. Simply putting ‘four tables’ or ‘ten chairs’ will not be acceptable.
Under the changes, all dealers will have to keep records of goods bought more than six years ago in order to qualify those goods for the margin scheme. Because records for income tax are only required to be kept for six years, this change is likely to be a nuisance for dealers who have thrown away their old stock books but still have old stock lying around. On a brighter note, dealers will no longer need to ask buyers or sellers to sign invoices.
Details of further changes and copy of Notice 718 can be obtained from the Customs and Excise National Advice Service. Tel: 0845 010 9000.
VAT changes bring red tape
Echoes of the Kent County Council Bill can be discerned in changes announced to the VAT secondhand margin scheme (notice 718). Dealers who use a system called Global Accounting to calculate VAT on profit margins will have to keep a record of the names and addresses of sellers on purchase invoices – a main requirement of the Kent Bill – when the changes come into force on July 31 this year.
