VAT

We can help

If you are VAT registered and need your VAT returns completing then we can do these for you.

VAT - what to consider.

Should I be VAT registered?

In short, yes, if

• Your business services or sales are taxable
• Your turnover (sales) exceeds the statutory VAT registration limit.

Can I register voluntarily for VAT?

Again the answer is yes you can - even if your turnover is below the statutory registration limit.

It can be advantageous for you to register voluntarily if:

• The nature of your trade means that your costs or purchases include VAT, and
• Most of your customers are VAT registered and can claim back the VAT that you will need to add to your sales.
• Or your supplies are mainly zero rated for VAT purposes.

If the answer to the above questions are no then it may be better to delay registration until necessary.

Special Schemes

Most registered traders simply add VAT, where appropriate, to their sales and pay this over to HMRC, less any VAT input tax paid to suppliers, on a quarterly basis.

For small businesses this can cause cash flow problems. You may have to pay over VAT added to sales invoices that is still not paid by your customers.

To help with this cash flow problem HMRC have created a number of “Special Schemes”. The most helpful are:

• Cash Accounting VAT Scheme - If your turnover is within the limits for the scheme you will only need to pay VAT to HMCE when you are paid by your customers. This is a significant advantage for businesses that have to grant extended payment terms to their customers or have difficulty in collecting payments.
• VAT 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 VAT Scheme - 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.
• VAT Retail Schemes - 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 mind.
• VAT Margin Schemes for Second-Hand Goods, Art, Antiques - Using a margin scheme, you only account for VAT on the difference between the price you paid for an item and the price at which you sell it - ‘the margin’. There are specific rules for defining what the margin is, and there are limits on the types of goods which are eligible for the scheme. If you use a margin scheme, you can still use standard VAT accounting for other items that you sell.

Apply for VAT registration

If you would like any further information about our taxation services, or have any questions or comments, please contact us.

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