Value Added Tax (VAT) is mandatory if your turnover exceeds £70,000 in any 12 month period (April 2010), or you wish
to reclaim VAT paid on purchases.
This means that every month/quarter you will need to fill out a VAT Return
and send it to HM Customs.We can carry out the chore for you for just £79.00 per quarterly VAT return. You just send us all your invoices
and receipts every quarter and we do the rest.
Sign up for our VAT return service online now and we will contact you to arrange the details.
You can register for VAT
voluntarily, even if your turnover is below the statutory registration threshold.
Not only can your VAT registration add credibility to your business,
but it can also be advantageous if any of the following situations apply:
· If the nature of your trade means that your costs
or purchases include VAT.
· If most of your customers are VAT registered and can claim back the
VAT that you have added to your sales.
· If your supplies are mainly zero rated for VAT purposes.
However, if none of the above
apply then it may be better to delay registration until you have to.
Our Advice regarding VAT Registration Issues:
· Never add VAT to your sales invoices UNLESS you are registered – to do so is a criminal offence!
Avoid delay if you
do need to register, otherwise you will incur penalties and interest charges, as well as having to account and pay over the
VAT due from the time you should have been registered.
Unfortunately, you may not be able to recover the outstanding
VAT from your customers.
Help for small businesses
Most registered traders simply add VAT, where appropriate, to their sales and pay this over to HMRC
after deducting any VAT input tax paid to suppliers. This is usually dealt with through a quarterly VAT return.
For small businesses this can
cause cash flow problems. You may have to pay over VAT added to sales invoices that have still not been paid by your customers.
HMRC have recognised
this and have created a number of “Special Schemes” to alleviate some of the cash flow problems small business may face, especially when they are just starting-up.
The most helpful schemes
Cash Accounting –
If your turnover is within the limits for the scheme you will only need to pay VAT to HMRC when you are
paid by your customers. This is a significant advantage for businesses that have to grant extended payment terms to their
· Flat Rate Scheme – Traders eligible to join this scheme can simplify their VAT accounting by applying
a flat rate percentage to their sales and paying this amount to HMRC.
· Annual Accounting – With this scheme you
agree an annual liability, based on the previous year's figures, and pay this over on an installment basis. At the end
of each year a final return is submitted and any balance due is paid or overpayment refunded.
– Ordinarily, registered traders are required to keep detailed records of every transaction. For retailers this could
prove to be a time-consuming chore. To avoid this, affected businesses can use one of the schemes set up with retailers in
How we can help.
As part of our tax and accountancy services we can provide further advice on when you should be registered for VAT and whether or not you should use any of the special
schemes outlined above. Once registered, we can complete your VAT returns for you, leaving you to manage the other aspects
of your business.