VAT Scheme, a good idea for Pub Co’s and the HMRC
A very poignant email from an Enterprise struggling Lessee, which says it all, I have not added the Lessees name for obvious reasons.
As an Enterprise pub I get a monthly bulletin (EmPowernews) the main article was ether to make you laugh or cry or both.
HMRC “Flat Rate Scheme for VAT.” Could save you money????
Depending on your business, the Flat Rate Scheme for VAT from HMRC could save you money and reduce the administrative burden of completing VAT returns. Under the scheme, you simply apply a 6.5% charge* to your gross takings, and you pay this amount across to HMRC in your VAT return.”
This is the state of Enterprise and probably other Pub Co they expect pub in their estate to make a living with sales under £3000 per week at their rent and tied prices.
Pub Co’s do not live in the real world of running a single unit pub.
I wish my poor fellow Publicans good luck if they make a living and can save money under the Vat scheme.
Note:- If the small lessee had been a large corporation based outside the UK, this scheme would doubtless have been 1.5%, if the HMRC are trying to save themselves admin costs, why not have a variable percentage depending on turnover, 6.5% sounds outrageous to a struggling pub, with Pub Co’s impossible rents, minimal or non existent discounts, hiked rates based on over renting and all the other issues stacked against the lessees.
Using a figure like 6.5% serves Pub Co statistics well to promote the theoretical profitability of a lease to impress gullible politicians.
Get real HMRC, I had a long discussion with one of your top Valuers a couple of years ago, after he gave a presentation on valuing pubs.
I raised many common sense issues and anomalies to him, which he had absolutely no idea about in running pubs, his view was strictly old practices which have been abused by successive Pub Co’s to their financial advantage.
He asked me to raise these points to HMRC about Pub Co’s application of these practices, I had an acknowledgement and nothing further, nothing changes.