"The hardest thing in the world to understand is the income tax." Albert Einstein
Let’s face it Tax in general is difficult to understand at the best of times and with so much tinkering and endless pages of rules and regulations, it’s no wonder we all get fed up and confused; rightly so. For years there have been pleas for a simpler tax system and although there have been a few changes, not enough is being done and even with these changes the tax system doesn’t seem any simpler.
Let’s take VAT for instance. All businesses have to register for it and everyone has to pay it at some stage and it’s one of those hidden costs that you tend not to worry about because it’s already included in the product, but it is considered one of the most confusing and even ludicrous of them all. So, let’s take a look at a couple of examples which I think you will find quite amusing but at the same time you’ll understand why VAT can be very frustrating.
If you’re a gardener with your own business you could be hit with this scenario:
- Seeds that are used for edible products are zero rated but flower seeds are standard rated unless part of the flower is edible. This means that sunflower seeds are zero rated unless they are bought as bird food which makes them standard rated.
And something a little more light-hearted but still very real:
- VAT is charged at 20% on gingerbread men decorated with chocolate but not if the gingerbread men only have two dots of chocolate for eyes.
If I can give you a piece of advice, get a professional to deal with this on your behalf. A professional who knows and understands the system and won’t get frustrated either. You can then concentrate on running and developing your business – without the headache.
If you like the way we think – you will like the way we work.
AIMS Accountants for Business are the largest independent association of professionally qualified accountants in the UK specialising in accountancy for small, local and independent businesses. AIMS are no ordinary accountants and we are more than just number crunchers!