VSME12005 - Check on business activities: introduction

• check whether there has been any change in activity requiring amendment of the trade classification. Complete a VAT 12 if amendment is required;
• enquire whether the trader carries on any other subsidiary activities, which should be covered by the registration. Record these activities, the percentage of turnover of the business, on the business summary screen in EF;
• if separate businesses are being carried on, ensure that tax is being properly accounted for on any taxable supplies made;
• check that the rules for disaggregation of businesses are correctly applied if a separation of business activities is evident (V1-28 Registration), under the 1997 legislation; and
• ascertain whether or not the trader has non-business activities/other sources of income, and note EF accordingly.

Ensure that:

• the trader appreciates the difference between business and non business activities;
• income from other sources has been properly accounted for; and
• the trader is aware that any tax incurred on purchases relating to non-business activities is not input tax and is not recoverable.

Where appropriate, an apportionment of input tax is carried out as detailed in Notice 700 - The VAT Guide 

Section 4.6.6 and Section 33 Special conditions apply to Local Authorities and similar bodies specified under VATA Section 33, See VAT Government and Public Bodies Manual.