VAT changes threaten debt-factoring hauliers
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• Hauliers using debt factoring companies could face extra financial problems as a result of new VAT rules set by HM Customs and Excise.
Nigel Fen-ington, senior VAT consultant with accountants Moores Rowland, warns hauliers receiving cashflow from factoring that they will now have to pay VAT on that amount immediately.
Mark Thompson, a VAT spokesman for Customs and Excise says the new rules are important as "previously customs had to wait until the factoring company had recovered a debt before any VAT was paid." He says Customs and Excise have had enough of companies "having their cake and eating it." He denies that companies will experience trouble through the new rules and claims firms will have the cashflow money so they will be able to pay the VAT.
Fen-ington is angry that there was no warning of the changes in the July Budget speech or in specialist tax magazines.
"This will prove dangerous if businesses have not taken these changes into account," he says. Thompson says that the news was available from the Budget through press releases.