VAT Balls up

Man in a Shed - when I'm not wasting time surfing the blogsphere and internet - is running a small company. I've just got VAT registration, and interesting experience given that the words software component and potential import export seem to set of the master alarm at the VAT man & woman's HQ in the Welsh Valleys.

I'm learning. And the most blood chilling warnings are still ringing in my ears from accountants about the VAT man/woman and not messing them around.

I've learned that suppliers from the EU, outside the UK, shouldn't charge me VAT. But I've learnt it too late and its going to cost be about GBP 45 that I should not have been charged and can no longer recover.

But its a learning game running your own business and I've chalked it down to experience.

As coincidentally the Chancellor seems to have done with the GBP 1 Billion VAT bill he's forgotten to factor in to the London Olympics accounts. I guess he's still learning about EU rules - poor chap, could happen to anyone etc ... but hold on a minute !

1. Its the people of London who will pay - not Gordon.
2. Doesn't the government get the VAT back itself anyway ( or is there some odd EU tax grab here ?). So what this means is GBP 1 billion from London to the rest of the subsidised country - the Chancellor's home country for example.

Am I the only one to find all this rather odd coming just at a time the government needs to raise much more cash ? Blame it on the Olympics - we had to raise taxes gov, no alternative.

Update: The Commons Confidential Blog takes an even more cynical view ( am I going soft ) suggesting Gordon is going for the old Eurosausage ploy.