Durham Cathedral Shop: More VAT Questions

Phil Groom writes:

Durham Cathedral Shop Receipt

Durham Cathedral Shop Receipt

A few days ago, Matt Wardman posted a query about Durham Cathedral Shop’s VAT Number History. Today, I’d like to follow that up by focusing on one specific transaction: the purchase of two Durham Cathedral branded fudge bars on November 24th: copy of my receipt on the right.

It’s a very small purchase, £1.50, an almost insignificant contribution to the day’s sales — but it’s not the amount that’s puzzling me: it’s the VAT status of the items purchased.

Books are zero-rated for VAT: confectionery and most gift items are not. Yet this receipt very clearly shows that this transaction was processed as zero-rated. This means that it’s unlikely to show in the shop’s VAT returns to HMRC; that HMRC are unlikely to get their 17.5% cut (by my calculations, about 23p) on that transaction.

Several explanations come to mind: incompetence; negligence; a simple goods-in or till programming error; perhaps a special exemption for Cathedral Shops whereby they don’t have to charge VAT on ‘Gift Items’; or there’s the unfortunate possibility of intentional fraud — but I’m sure people of Philip and Mark Brewer’s integrity would never set out to defraud anyone, least of all HMRC.

No doubt such errors are routinely picked up and corrected by the company’s accountants; but in the meantime, I can’t help wondering how long this has been going on, how many ‘Gift Items’ are going through those tills as zero-rated. Could be an awful lot of 23p’s and more that need accounting for…

Next time, by the way, I hope to see the price on those fudge bars reduced by a penny or two, now that the VAT rate is down to 15%; unless, of course, there is that special exemption for Cathedral Shops…

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7 responses to “Durham Cathedral Shop: More VAT Questions

  1. The VAT invoice is wrong, but the shop will still have to pay HMRC 22 p in VAT on this transaction. Cathedral shops do not have any special exemptions from VAT.

    There are regular VAT inspection audits of traders and this sort of mistake will be picked up, if the matter is not corrected when the quarterly VAT return goes in.

  2. Valiant for Truth

    Having handled “food” items in gift shops, there were strange anomalies – chocolate was definitely VAT rated, but some other confectionery was not – perhaps fudge was one such item. Communion Wafers are zero rated as they are classed as bread.

  3. Looks to me like everything is a fudge. As far as I know, Booksolve was asked to solve this problem.

  4. Fudge is definitely vatable; but flapjack, being food, isn’t; so maybe they should switch to selling Durham Cathedral Flapjack instead, keep it simple.

  5. One way or the other Brewer will have to pay value added taxes – whether he will be in a financial position to do so is another question. Is Phil Brewer or Mark Brewer the “Big Daddy”? Roll on 11 December. Wonder which of the companies is paying the barrister to represent them at the tribunal.

  6. I suspect what this comes down to is typical, run of the mill Brewer incompetence — the kind of slapdash approach to business you’d expect from someone who:

    1. Registers a company to manage the Durham Cathedral Shop under the name “Durham Cathederal Shop Management Co.” — of course, it’s possible that somebody else, equally incompetent, took care of the company registration. It’s also possible that this is a cynical way to ensure that anyone who files a claim against the “Durham Cathedral Shop Management Co.” will fail because there is, in fact, no such legal entity, but I honestly can’t see either of the Brewer Bros managing to think that far ahead, let alone that clearly;
    2. Says he wants to disassociate his company from the SPCK name but continues trading under SPCK signage until Trading Standards launch an investigation;
    3. Spells “Leicester” and “Worcester” as “Leichester” and “Worchester” — again, it’s entirely possible that somebody else, equally incompetent, compiled the list of shops and produced the map;
    4. Denies expressing his condolences to the family of a man who committed suicide after he fired him — of course, it’s entirely possible that somebody else took the initiative for this…
    5. Goes into panic mode the day before his bankruptcy filing is about to be scrutinised, realises that all the evidence needed to expose his folly is available online and starts firing off threatening C&D emails to all and sundry in a desperate bid to hide that evidence;
    6. When challenged about threatening Dave Walker into taking his SPCK/SSG posts down, says ‘I have no idea what you are on about’ ;
    7. Can’t get the name of his own company right when he attempts to file it for bankruptcy;
    8. Fails to realise that filing a UK company for bankruptcy in the USA is not allowed anyway;
    9. Actually, I think that’s probably enough for now, but if someone else would like to continue this list, feel free to carry on.

    How a law firm like Brewer & Pritchard PC manages to stay in business with such a klutz at the top remains a mystery…

  7. Should Mark Brewer be reading this he would say “ouch” at every point. He also offered condolences to Mrs Jeynes and then withdrew the condolence. So even at a very human level he should be saying, “I’m so very, very sorry.”

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