VAT
VAT is one of the most awkward taxes to report correctly, as VAT rates change depending on the goods or services being offered. Things get even more complicated if you deal with imports, provide mixed supplies or offer your services to customers abroad.
It is not worth your time trying to learn how to fill out your VAT return yourself.
We have already done the learning and prepare VAT returns every day. We make VAT simple for you; we handle your filing ensuring your VAT return is accurate and on time. All you need to do is provide us with your invoices and receipts.
VAT FAQ's
What is VAT?
VAT (Value Added Tax) is a tax added to most products and services sold by VAT-registered businesses.
WHEN SHOULD I REGISTER FOR VAT?
You have to register for VAT if either your VAT taxable turnover for the last 12 months is more than £90,000, or you expect your VAT taxable turnover in the next 30 days will exceed £90,000.
WHAT IF I GO OVER THE THRESHOLD TEMPORARILY?
You can apply for a registration ‘exception’ if your taxable turnover goes over the threshold temporarily.
WHAT IF MOST OF MY SALES HAVE A VAT RATE OF 0%
If most of your taxable goods or services have a VAT rate of 0% (zero-rated supplies), you might not need to register for VAT. You’ll need to ask HMRC for permission – this is called an exemption from registration.
WHAT IF SOME OF MY SALES ARE EXEMPT FROM VAT?
Your business is partly exempt if your business has incurred VAT on purchases that relate to exempt supplies. This is known as exempt input tax.
Generally, you will not be able to reclaim exempt input tax. However, provided the amount of exempt input tax is below a certain amount, it can be recovered in full.
WHAT ARE VAT SCHEMES?
VAT schemes are designed to simplify the way some VAT-registered businesses calculate and account for VAT. The most common two are Cash accounting and Flat rate, but there are others. We will assess your business and advise on the best option for you.
WHAT IF MY SERVICE IS UNDER CIS?
If you are a VAT registered business and your service has been reported within the Construction industry Scheme, you must use the VAT domestic reverse charge. This moves the burden of reporting the VAT onto the larger contractors and if most of your sales are under CIS, your VAT return will show a refund every quarter; aiding in your cashflow.
HOW DO I FILE MY VAT?
We recommend using Xero accounting software to prepare and file your VAT return.
WHEN IS THE DEADLINE?
The deadline to file and pay your VAT return is 1 month and 7 days after the period ends. A VAT period ending in March would have a deadline of 7th May.
WHAT ARE THE PENALTIES FOR NOT FILING MY VAT?
VAT penalties work on a points-based system. You receive one point for each return you submit late until you reach a threshold at which point you’ll receive a £200 fine.
HOW DO I PAY MY VAT BILL?
Click here to see how to pay your VAT bill. You will need to quote a reference with your payment. This will be your 9-digit VAT registration number.