Is my corner shop scamming VAT?

[GarlicRound]

Or am I being unusually thick??

The only way I can make this work is if tax is registered for the biscuits, crisps & tobacco (total £24.74) but not the cigarettes (£14.60).

If they are cheating, would you dob them in? It's a tiny shop run by a youngish couple.

WH Smith High St stores were bought by Modella Capital and have been rebranded as TG Jones - they're still shit with no customers. WH Smith itself is now just airports, stations and motorway services.

The VAT amount on the receipt is there for YOUR benefit. If you make purchases that include VAT and can justify those as business expenses, and your business is registered fir VAT, you can offset the VAT total on receipts like this against the VAT you have to pay on your own business takings. The £14.60 you paid for cigarettes does include tax but there is specific legislation that you are not allowed to reclaim that tax even if it was a business expense. Thd receipt is making sure you don't fiddle your vat.

You have no idea whether they are fiddling their VAT. The records that are used for them to work out how much they need to submot to HMRC are a lot nore complicated

I don’t think I’ve ever asked for a receipt in a corner shop 🤣

That was a shit moce by Modella!

Thanks, all. I've decided that IABU, on the basis that:
~ Till receipts aren't VAT receipts (I didn't know this before)
~ If they were scamming HMRC, they wouldn't advertise it to customers.

I've also learned that, of the £36.10 I paid for tobacco products, approx £30.50 was tax. I could almost feel virtuous about smoking 😏

Nope. They were completely seperate divisions for years. Both divisions being profitable, although the airport/stations division obviously far more profitable. Now the High Street division has been sold off, hence the rebranding, so they're not even the same company anymore.

The High St usually makes money because they're often the only place that sells specialist magazines, foreign newspapers etc, upon which margins are huge. Basically if you want a magazine that Asda don't sell, you're only hope is your local WH Smith (or TD Jones as they're now branded), especially as most small independent newsagents have now closed down too.

Never mind somebody not entering the tax code correctly; I remember the days when, if you asked for a receipt from a lot of little independent corner shops, it would just have every single item helpfully listed as 'Miscellaneous'!

Has anyone mentioned the biscuits V jaffa cakes legal battle and the fact that biscuits are VAT free but Jaffa cakes were not.....

I did notice the biscuits on OP's receipt and I had to think which way around it was with the VAT/non-VAT status!

They shouldn't have called them Jaffa cakes!

But they did that deliberately, as biscuits are considered luxury foodstuffs and subject to VAT, whereas cakes are (for some bizarre reason) classified as essential basics, and so they don't attract VAT - so they seem better value and thus more appealing to potential customers who haven't seen the much cheaper, very similar supermarket own-brand ones!

I also read somewhere that, apparently, you're supposed to eat them upside down compared to how virtually everybody does eat them - so with the chocolate covered lumpy bit facing downwards!

Quite glad I packed in when I did. Who can afford to smoke man!

No one can claim VAT back on fags so maybe they just get grouped separately for easy totalling. If the biscuits were plain ish ones they may not have had vat on them

I'm pretty sure the shop's till doesnt need adding up to be made easier

There isn't someone with an abacus sitting inside 😂

Wrong, they have both duty and vat. In that order too, so you pay 20% vat on the cost of the product and the duty. So your paying vat on the duty as well.

Same as petrol and alcohol.

I suspect that it is not showing on the vat receipt is because it's not VAT that a business could ever claim back as it could never be justified as a business expense.

I don't think that's quite correct, say a shop that sells cigarettes ran out of stock and went to the corner shop to buy some to sell to their customers they would be able to claim the VAT

To me the most likely thing is that the till has been set up wrongly

From Google:

In the UK, Value Added Tax (VAT) is charged on cigarettes, but it is applied after tobacco duty, not instead of it. Therefore, if a receipt shows no separate VAT line item for cigarettes, it is because VAT is already included in the final price, which also contains a significant amount of tobacco duty.

Is that the price of smokes 👀.

I guess those vapers are not so ridiculous at all ☹️.

The information from the till is used as the starting point for the vat return but the business will make adjustments etc prior to submission. They probably just want all the tobacco in a separate category

Plus a lot of company expense systems would detect vat on receipts. This way no customer would inadvertently claim vat back on staff expense claims.

One tax consultant has explained it that a biscuit starts hard and goes soft but a cake starts soft and goes hard. I'm sure I remember him saying that was how a particular tax court/tribunal case decided what was a biscuit and what was a cake! Doesn't help with something like a Jaffa cake that has both "hard" and "soft" bits!!

Oh yes, I don't think there's any doubt that it can be technically classed as a cake based on that material fact, so people can freely and legally buy these cakes without having to pay any VAT on them.

If they want them, they'll easily find them at all major supermarkets... right there in the biscuit aisle

If they were scamming then the sales certainty wouldn't be going through a modern electronic point of sale till. I would rest easy!

From my experience, such things are simply a complete lack of training/interest in the workings of the till from the proprietor/manager. It's amazing just how few EPOS systems are set up correctly. I can't think of more than a handful in 40 years of being an accountant! The thing is that EPOS is time consuming to set up and even more time consuming to keep stock levels right as you need to constantly check stock levels and adjust for breakages, theft, and things rung through manually (i.e things that didn't scan rung through as "misc"). The vast majority will work out the right amount of VAT to pay over to HMRC via other means, i.e. typically one of the many optional retail schemes that work in ways other than the till settings. Most owners/managers just give the illusion to staff that they're checking up stock levels etc in order to try to avoid the counter staff stealing cash and/or not ringing through sales properly, i.e. to friends/family etc. It really is more a matter of deterrence in small/independent shops rather than the till being the "centre" of the entire sales/stock system. The other main reason is simply the scanning for quick and simple ringing through the till - as long as the item and price scan properly, that's all the matters to many owners/managers.

I agree, most that are engaging in tax evasion and/or money laundering will have dual systems, i.e. two different till systems or different "channels" i.e. shop till and e-commerce, or even just a separate till/box under the counter where sales never goes through any books. The criminals (which is what they are) won't be making pretty simple/obvious cock ups with the shop till - they're a lot more complex than that.