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vat.gb.com
Author
Alex J. Dyball.
5th November 2008.

Do the Government get it Right?

 Joshua 1 v 8-9.  This Book of the Law shall not depart from your
mouth, but you shall meditate in it day and night, that you may observe to do
according to all that is written in it. For then you will make your way
prosperous, and then you will have good success.  Have I not commanded
you? Be strong and of good courage; do not be afraid, nor be dismayed, for
the LORD your God is with you wherever you
• The purpose of this site is to explain
that the Value added tax is being
implemented illegally and it is your
businesses which are paying.
B. Because they are overcharging the public, since the prices
are inflated by the method outlined by the government.
C. Bankruptcies are being inflicted on businesses unfairly
and illegally.
The next 2 slides came from a HMRC
seminar.
The Blue & Red parts were added by me.
Do the Government get it Right?
Do the Government get it Right?
2.Chapter 23 of the VATA 1994 clearly states
Part I:3 (1) “A person is a taxable person for the purposes of this Act while he is, or is required to be, registered under
this Act”.

Now it is perfectly obvious that the government cannot take the public to court.
Therefore vat as is stated in the Act is correct. He is the responsible taxpayer. Do you agree?

There is only one VATA 1994 so it covers all businesses (registered and unregistered)so the liability for vat or rules
governing the liability must be universal (applied equally to all). This raises two points which are not clarified in the
Customs & Revenue guidelines
•The VATA 1994 states Chapter 23 Part I: 1 (2) Vat on any supply of goods or services is a liability of the person making
the supply and becomes due at the time of the supply. Now this is not the responsibility or the liability of the customer/
the consumer it is the supplier. But under the provisions of the Act the business recovers the vat charged at each
stage from the customer/and passes it on eventually to the consumer
But the business can only pass on what it has been charged

This is the authority given to HMRC to implement the tax in

the previous slide. Nowhere does it state it is 7/47ths of the
Selling Price!
Surely the law is the law – and this is quite clear & specific.
From Wikipedia, the free
Value added tax encyclopaedia
(VAT), or goods and services tax (GST), is a
consumption tax levied on value added. In contrast to sales tax,
VAT is neutral with respect to the number of passages that there
are between the producer and the final consumer; where sales
tax is levied on total value at each stage, the result is a cascade.
Do the Government get it Right?
 £117-50 x 7/47 = £17-
50

This is another slide from HMRC presentation

The Vat Fraction has been corrected to agree with the
other HMRC Slide

This is a misnomer it is a Sales tax

fraction! Do the Government get it Right?
 Corn seed £20 zero rated
for Vat
Farmers books
Now the Value added of any
Rent of Land £22 exempt for
business from a Barrow boy to a
Vat
Department store is cost of
Labour+ Profits.
So in this example it is £50 –
Tractor £ 2 Capital
Exp . Portion of inc vat 30p.
Just as depicted in a previous Paid direct
slide – now 17.5% of £50 is
£8.75 which is the amount the
farmer can pass on – but he has
already paid 1-20p (inclusive in
Diesel £ 1 inc vat
15p. Paid direct to HMRC by
his expenses – so he pays HMRC
petrol station
£7-55.
Or to explain it different
Tractor is £1-70 + 30p = £2- Accountant £ 5 inc vat
00 75p. Paid direct
Diesel is .85p + .15P = £1-
to HMRC by Accountant
00
Accountant £4-25 + 75p = £5-
Labour £10 Liable to Vat
Profit £40 this
business £8-75
Factor
y Do the Government get it Right?
 From
Farm
Factory’s books
The Factory’s Value
added is again Labour +
Profits this is £7-00
because his VA is £40.
But he passes on what he
has already paid £12-75–
so the amount charged to
the retailer is £219-75.
Not £235.00.
The factory pays HMRC

£7-00

The Vat due on the Machinery & Office

expense is only a portion of original
cost . Paid by suppliers. Whereas the
Retaile Advertising in local paper is direct and
r they would pay HMRC.

Do the Government get it Right?

 From
Factory

Retailer’s books
The Retailer’s Value added is
also
Labour + Profits which is in this
instance VA of £30. So the tax
is £5-25
Making the total Price to the
consumer only

£29-00
Not as stated originally

£52-50

Total Cost is £329-00 to consumer not

£352-50

Over charge to Public is

£23-50. Do the Government get it Right?
Summary of how the Government get their money

Overchar
ge
Illustrates
How
HMRC
Are
conning
The Public
what

Do the Government get it Right?

 HMRC mistake in a Nutshell!

HMRC mistake is based upon their calculation that every business

has a vat liability of selling price + 17.5%. They call it the VAT
fraction. But as we have demonstrated VALUE ADDED is Labour +
Profits on a cash basis*. They have ignored the amalgamation of
exempt, zero and lower rates of tax. Their theory would be correct if
Vat was all standard rate. Notice in our examples Farmers VA is
£50(40) + £8-75(7)= £58-75(47).This is perfectly correct. But it is on
the Value
*This added
terminology not
is taken fromSelling Price!
Professor John Kay’s book “Foundations of Corporate success” – Cash
basis means it ignores Depreciation in
Dothe Profit
the & Loss Account.
Government get it Right?
 Why has this gone un-noticed? These are the figures on your
income tax form and your profit & loss accounts, put yourself
in the different businesses.
Farmer Factory Retailer

Subject to income Subject to NHI &

tax Do the Government get it PAYE
Right?
 Looking at it from a selling price including
vat
Invoice by retailer. £329-00 Outputs including vat.
Factory Invoice £219-75 Inputs including vat.
Value added £109-25 V. A. including vat.
Exempt items Rent £ 30-00
Bank interest & Chg. £ 10-00
Adjusted ................... £ 69-25
Lower rate...Lt & Ht... £ 10-50 Vat @ 5% .50p
Taxable @ Standard rate £ 58-75 7/47ths of this is £8-
75
Due to be paid to HMRC by this business £9-25

Figures on
Form 100
Do the Government get it Right?
 Legal background of VAT
Vat in the 6thDirective is charged to all members of the EEC at 1% of GDP. (Old
& New)
What is GDP it is everyone wages in the UK + profits of all businesses. So this
means everybody from Her Royal Majesty the Queen, Gordon Brown,
Policemen, Teachers, Bank Clerks, Petrol Pump attendants, supermarket
staff, Hospital staff & Doctors, share dealers etc. Then you add all the
profits from the Banks, Supermarkets, Oil distributors, Newspapers, etc.
Now after they have establish what they owe – the EEC allow the individual
governments to charge the general public, provided they do not exceed
25% In the UK they have Standard Rate 17.5%, Lower Rate 5%, zero rate &
exempt. In France they have a 19.6% Standard rate. In Eire their standard
rate is 22%. But at present we are concerned about the Great Britain.

Do the Government
*Insurance is taxed separately but in working get it Right?
out VAT liability the full amount including tax is on P&L a/c
 HMRC says you owe
£47-28

Again this is the earlier HMRC slide adjusted to convey the caterers position.
Now HMRC say if a caterer sells a meal at £317-50 as above then he owes 7/47ths
of that figure namely £47-28. But as you can see his liability above is £17-50. So
when he pays HMRC £47-28 he is £29-78 short. Where does he get it?
How does it arise – well 7/47ths of £100 for both the Farmer & the Wholesaler is
£14-89 each = £29.78. The caterer can only pass on what vat he has paid so it
would be illegal to pass on zero as £14-98. HMRC method is deception/fraud.
Do the Government get it Right?
 True way the vat system works

Fisherma Catere Customer

Farmer
n r

Seeds
£20 Boat £20 Equipment £10

Land Tackle £20 Lt & Ht £10 Vat

£20 £1-75
Diesel £10 Vat
Costs £1-75 Potatoes £100 Vat
£40 zero
Costs £50
Sell Vat £1-75 Fish £100
£100 Vat £1-75
Sell £100 Vat
£1.75 Costs £220 Vat
£3-50
Value Added £50
Value Sell £300
Value Added £80
Paid to HMRC £0 + £1-75 +Vat £ 14
Lt & Ht £1-75 +
Caterer £10.50 = £14
HMRC say £17-50 +the Government
Do £17-50 get +
it Right? £17-50 + £300 =
 This is why it has gone
undetected!!!!!

Secondly as we indicated earlier it does not appear in anyone’s

accounts – so it cannot be audited. It is a very grey area and it
confuses valuations. Similar to metric weights and troy weights!
Do the Government get it Right?
We hope this site has enlightened you to the pitfalls of
assuming that everything the HMRC advocate is correct.
The whole synopsis of the VAT situation we have just
outlined is based upon the Government examples. We
appreciate that the Government has to run the country but
when Vat was introduced it said it would not influence
businesses – but we have demonstrated here three things.
2. Government has caused inflation with the system they
are using to the public. (Because businesses are
ignorant of the details)
3. It has made businesses bankrupt and caused untold
hardship and unemployment.
4. They have ignored Exempt, Zero & lower rates by
adopting their “VAT Fraction” which as we have said
If you
beforehave
is not any
in thequeries
VATA 1994we
norwould be willing
the 6th Directive EEC to
answer them.
But before you ask us ask your local HMRC
Inspector.
This will have a profound improvement of
your finances. Do the Government get it Right?
OR JOIN OUR PETITION.