Value Added Tax (VAT) is payable to HMRC for goods and services. Any business in the UK with a turnover threshold for VAT (£85,000 IN 2020) must register for VAT and charge VAT on any product sold or service rendered. In addition, you need to submit your VAT returns every quarter and send them to HMRC with payable VAT.
VAT is charged at 20% on services and goods in the UK, but some services and goods such as radiators and Children’s car seats have different VAT rates.
Businesses offering goods and services that pay VAT can voluntarily register for VAT as registering for VAT has several benefits. For example, being registered for VAT allows you to claim VAT on goods or have the VAT refunded.
At The Accountants London, we offer a complete VAT registration service to ensure all our clients are registered with the right VAT scheme and have the necessary documentation. You will have a dedicated account manager who will discuss everything needed to have you registered on the right VAT scheme.
Our expert, your account manager, will assess which VAT scheme would best suit your business, register you on the scheme, and guide you in raising VAT invoices. The UK government has different VAT schemes to suit the condition of various businesses.
Issues relating to your business’s VAT is essential, and getting it right is necessary to avoid fines and other penalties. With our accountants handling your VAT, you have nothing to worry about. Even if your business does not currently meet the criteria for VAT, we can help you start preparing for it.
With little knowledge about VAT and account, you can easily make the wrong choices, and even when you make the right choices, you may fail to take full advantage of your chosen VAT scheme. However, if you have experienced accountants like us, it can save you from different issues and money.
We are professionals and do not believe in waiting until the last minute to file the necessary documents. Instead, we ensure that we have all the required documents ready for submission at the right time, so you have time to double-check before submitting them.
You will have a dedicated accountant who knows how your business. The accountant will review your VAT returns and submit them to HMRC. Our accountant will provide you with the relevant VAT returns report and the amount you need to pay.
Our team of accounting experts will advise you on EU/EC sales depending on your account’s position. Furthermore, you would know the right advice for your business concerning financial issues as we handle your finances.
The flat rate VAT scheme benefits small businesses in several ways. First, it helps reduce the time they spend on VAT accounting. Second, with the flat rate scheme, small business owners do not need to calculate VAT on every transaction but pay a flat rate percentage on the turnover as VAT.
This percentage is less than the standard VAT rate because there is no VAT reclamation on purchases. The percentage on flat-rate varies, and your flat-rate percentage will depend on your trade sector.
Although this flat rate VAT scheme can reduce your paperwork, you cannot reclaim VAT on purchases. If you buy many products from VAT registered businesses, you may pay more VAT. If you make more zero-rated or exempt sales, you could pay more VAT, as you will be liable for paying the flat rate percentage on your turnover for these sales, regardless of not being charged VAT on the sales.
The flat rate VAT scheme is more suitable for service-oriented businesses such as contractors and consultants or businesses with less vatable purchases.
With the standard VAT accounting, you can reclaim VAT made on certain purchases. You will reclaim or pay the net of the VAT you charged your customers and the VAT paid on your purchases.
The standard VAT accounting method involves the accrual basis of accounting – your VAT calculations will depend on the invoices raised and not the date invoices were paid. This method may negatively affect your business’s cash flow because you would pay VAT to HMRC for goods and services sold but haven’t received their payment.
However, if you have not paid for the purchased goods, you can claim the VAT on the invoice received so that this method can leave a positive impact on your cash flow.
Unlike standard VAT accounting, cash accounting involves calculating the actual VAT paid or received instead of invoices. Cash accounting can positively impact your cash flow if you have customers that do not pay on time, and you won’t pay VAT if your customers never pay for your product or service. It may also be more beneficial if you have bad debts.
We offer our clients the following;
The right VAT scheme can have a huge impact on your business, and it is necessary to consider several factors, like the product or service offered, revenue, and nature of your business, to get the right VAT scheme.
Even with the right VAT scheme, you may still have problems during the registration stage. Many people do not know how to register for the VAT schemes correctly, so having an accountant becomes necessary.
If you are not MTD compliant, our accountants will set you up on MTD compliant accounting software and ensure you are fully compliant. Our experts specialise in Free Agent, Xero, and QuickBooks. As a result, several businesses in the UK trust us because we are MTD compliant and fully accredited.
All our accountants at The Accountants London are experienced and qualified. Our team is constantly working to ensure all our clients have no VAT compliance issues and do not miss deadlines. We will file all the necessary documents for your VAT early to enable you to make the required arrangements.