it’s come to my attention that this new place is almost certainly not charging the correct VAT rate on sales,
How do you know? Are they charging a lower rate? Or none at all?
Possibly not, but if not they should be. Given their likely rent and the number of people they employ their expected turnover must be well over the threshold.They may not be VAT registered
The specific product is a take-away coffee, which should be 13.5% (up from 9% since the start of the year). The company I'm involved in sells products at 0%, 13.5% and 23%. We got written advice from Revenue when we started on a few items, as it can get quite complex. Coffee is not one of those items: it's not credible they don't know the rate it should be. If you recall at the start of the year the price of a coffee made the press as it was increased due to the VAT rate change.They will have to make up the shortfall themselves when it comes to an examination by their accountant or by a Tax Auditor so therefore they are likely running at a loss.
But you should post up the industry you're in...to ensure you're not at the wrong rate yourself! Which is admittedly unlikely - most retail businesses are standard rate.
A sort of passive-aggressive approach?You could ask the VAT office if you are charging the right rate of VAT as it appears that a competitor is charging a different rate?
Brendan
Could you not just go and buy a cup of coffee there?
I did - that's how I know what they're doing!Could you not just go and buy a cup of coffee there?
It might be better to drop in and have a chat with the owner. Welcome them to the area.
it's just that they seem to be helping themselves to an extra 13.5%
That's a fair point, and one I've already acknowledged as a possibility. It's happened to us when our POS terminal supplier said they'd take care of setting it up if we have them the incormation; of course they managed to get some of the VAT rates wrong. Luckily we spotted it before we went live.It is most likely an error. If they wanted to defraud the VAT, they would not show it as 0% on the receipt.
I'm coming around to your suggestion: I will probbaly follow your advice if/when the owner shows up when I'm around.
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