VATupdate Newsletter Week 17 2025

MACHINERY

“Do not operate heavy machinery.”

It’s that familiar warning on medication boxes. They probably mean, “Don’t drive a car when you take these pills.” But in my mind, it’s always a forklift.

If you’ve just got your driver’s license, driving a car can be quite challenging. You have to operate the pedals, pull on the steering wheel, and meanwhile pay attention to dozens of other people trying to do the same thing. Oh, and of course, mind the pedestrians (said in my best Hyacinth Bucket voice – if you get that reference, you’re as old as I am).

But after a while, you get used to the cars and the roads. It’s no longer special or difficult. You could almost do it with your eyes closed — which I strongly recommend you do not try! So how much harder could it be after taking a medicine?

But operating a forklift — now that’s another story.

I imagine you’re navigating a giant warehouse stacked with pallets and crates, lifting and moving boxes from one place to another. You can’t do that without focus and precision.

It’s almost like filling in a VAT Return. The first time you tackle it, you ponder every single box you have to fill in. One wrong move, and you might have a serious problem. But after a while, you get familiar with the boxes and the information you need to report. That’s when you start looking beyond the numbers — at what’s behind them, the real structure of your transactions.

That’s when the heavy machinery comes in.

Because just like operating a forklift, managing VAT compliance demands alertness, training, and a healthy respect for how badly things can go wrong if you’re not careful.

Take the seemingly simple task of applying the correct VAT rate. Sounds easy, right?

But slip up — miss a reduced rate, mishandle an intra-Community supply — and it’s not just a toppled shelf. It’s audits, penalties, and the kind of administrative headache no amount of ibuprofen will fix.

Or think about the rules for chain transactions in cross-border trade. A moment of inattention — one wrong assumption about transport arrangements — and suddenly your zero-rated intra-EU supply is a fully taxable domestic sale. BEEP BEEP BEEP — that’s the sound of your compliance forklift reversing out of a warehouse full of liabilities.

VAT is heavy machinery. The parts may look manageable, even familiar: invoices, declarations, registrations. But once they start moving — between countries, between interpretations, between tax authorities — they require real skill and care.

So yes, next time you see “Do not operate heavy machinery,” think forklifts. And think VAT. And maybe, just maybe, leave both to the professionals when you’re not feeling 100%.

And of course you can always check our website, www.vatupdate.com, if you need a prescription or just want a second opinion.

If you have any comments, questions, or ideas that you want to share with us, please send us an email at [email protected] or leave a comment under the posts of this newsletter on LinkedIn.

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