All businesses with turnover exceeds current VAT threshold of £85,000 must register for VAT and complete and submit VAT returns to HMRC. Usually it’s every quarter unless agreed otherwise to pay VAT.
VAT, is a broad-based, general-purpose consumption tax calculated on the value added to goods and services. It applies more or less to all goods and services purchased and sold for use or consumption in the UK. Goods sold for export or services sold to customers outside UK are not normally subject to VAT.
Recent changes in legislation with VAT record keeping also known as Making Tax Digital (MTD)has been the recent big changes in recent times. In short this means keeping all records electronically for all your VAT returns and must file these returns using approved HMRC software provider.
Most popular and usual method of VAT accounting method is a Standard rate VAT method. However furthermore there are few more VAT accounting methods/scheme which are alternatives to standard scheme are as follows:
1. Annual Accounting method: In this scheme instead of quarterly returns you only submit VAT return annually.
2. Flat rate scheme: This scheme allows you to charge full standard VAT to your customers but pay HMRC VAT at reduced rate. Depending on your nature of business different businesses has different flat rates given by HMRC.
3. Cash Accounting: This scheme allows you to account for VAT as and when payment is received rather than just an invoice date.
All of the above schemes/methods have their own advantages and disadvantages and some are only available for limited turnover businesses.
Most of the consumer goods being traded in the UK are subject to VAT. VAT is one of the most important and commonly asked taxes by consumers all over the world. According to the recent update on VAT, even businesses in foreign countries such as in China, US, Canada, and many others that are trading items such as clothes, shoes, and other commodities to UK customers via the Internet are legally required to file for VAT registration in the UK as well.
Import and Export Department is responsible for the processing of your tax return and is collecting the taxes that you have paid on the imported goods. You need to make sure that the items you are importing are from countries that do not require VAT to be declared on their imports. The main aim of the IED is to reduce the amount of VAT that is being collected on the importation of goods, but this process will only take place when a country is not VAT-free.
Like any other government regulated business registration, getting registered with the VAT authorities may not be easy or fast. Even though the requirements are similar to other registrations, there are some differences in the way these businesses are conducted. Therefore, if you want to get the best results from the VAT registration process, you need to hire the services of an accounting firm that has a vast knowledge about the regulations, rules, and regulations that govern the registration of businesses for VAT.
Total Tax Accountant has a team of qualified accountants with a lot experience in handling VAT services.
From VAT registration to VAT returns, we help you throughout and provide you a comprehensive professional service which exceeds your expectations.
At Total Tax Accountants we can help you to choose the right scheme for your business and assist you with either quarterly or annual VAT returns. With recent changes in legislation it is recommended that professional and expert advisor in on board with you in order to run your business operations smoothly. Many businesses forget to distinguish between VAT money with businesses income and when VAT bills are due then this effects business cashflow. With us we can always keep you on top of your business cashflow with regular updates of your VAT liabilities. Get in touch today for an expert advice.