Value Added Tax (VAT) can be complex because it is subject to many rules and exceptions. Proper planning must be done to avoid both fines and over payments. If you are looking for knowledgable VAT accountants, then look no further then Audtax!
VAT Accountants London
We are expert VAT accountants who will guide you through the process of your VAT liability, so that you can stay on top of the ever changing laws.
Businesses with a turnover under £150,000 will additionally be assisted to make extra thousands by getting registered on the VAT flat rate scheme, which may be the best VAT scheme option for them.
Being VAT registered is a requirement for businesses with higher turnovers (making over £85,000).
How is VAT calculated?
Businesses charge VAT on sales. It is a consumption tax and so they collect this VAT directly from the customer.
If a product is £1, the business charges them £1.20, and keeps back £0.20 to pay at a later date to HMRC. Some items such as books have a zero rate of tax, and others have the standard 20% rate.
Our VAT specialists know all of the different rates and be able to advise you. We will also be able to advise you on other VAT issues, from setting up software to dealing with HMRC and arranging payment plans etc.
When do you register for VAT?
VAT registration is a must for many businesses, especially ones with a large volume of sales. There are two different times when you should register for VAT.
The first is the most regular, and applies if your taxable sales go over the threshold of £85,000 in any previous 12 months – then you must register for VAT. Or, if you expect them to be over this threshold in the next 30 days then you should do so as well. These are your VAT responsibilities.
Whether you are a small business, limited company or sole trader, the rules are the same for everyone regardless of the nature of your business. The registration process is not as easy as it looks, so we may need to work out the registration date. We will also need to formulate the best vat scheme in order to help you reduce your vat payments.
How is VAT paid?
VAT liabilities are paid via VAT returns digitally. Your company pays what it needs to on either a quarterly or monthly basis, which may have an impact on your cash flow. This is part of your VAT compliance. It can be paid by direct debit to HM Revenue and Customs direct.
Why choose an accountant to do your VAT?
VAT accountants are the normal way that the vast majority of businesses conduct their Value Added Tax returns. This is an extremely complex issue and it would be very easy to make mistakes when not using VAT specialists.
Most firms have a VAT team that keep up to date with all the latest regulations and offer specific VAT advice. They also know how best to deal with any issues and possible VAT inspections that arise.
Many business advisors and accounting services employ VAT specialists as the process to pay and claim VAT is so intricate. We would never recommend you undertake this service yourself and the same should be said of your company tax return.
Our VAT services
At Audtax, we offer a comprehensive service for VAT accounting which includes a wide range of VAT returns. Our VAT accountant team are specialist and understand the complexity of this.
- The preparation of the VAT Return
- Filing of the VAT Return
- Advise on the VAT Rates
- Advise on VAT Schemes
- Advise on any Allowable Expenses
- Deal with any subsequent VAT Investigations
All of these are important aspects. Some will apply to your business and some may not, but they are all vital to be aware of. Most importantly you may be eligible for deductions and exclusions, and without our knowledge and support, you may not become aware of this.
Frequently Asked Questions
What is Making Tax Digital (MTD)
Making Tax Digital is an essential scheme for all businesses that are VAT registered. It is a way to make tax administration more effective for everyone.
This is an accounting system that ties in with invoicing and sales. Taking this system on is something businesses that are VAT registered must do. Yet this does make completion of VAT (Value Added Tax) returns easier to do within the accounting period.
Can I submit VAT without MTD?
Since the new rules came in for Making Tax Digital, no you cannot complete your VAT return without having done your MTD work first. They are thoroughly tied in together and you cannot have one without the other.
It is important to get on with Making Tax Digital and incorporate it into your systems. There are many new softwares programmes which ensure this is a simple transition, it is simply a matter of choosing the one that is best for your business.
What will my VAT period be?
For most businesses completing VAT returns, they do so every quarter. This is when VAT is paid and also when VAT can be claimed back on purchases.
Some businesses are mostly VAT free, so if you sell books, then the majority of things you sell will not have any VAT paid by the customer. Therefore the VAT you need to pay to HMRC, will be much smaller than say a restaurant or a gift shop.
However, there are some kinds of businesses that might have a huge amount of purchases they need to claim VAT on, such as a house builder paying for services for example. In this case it is possible to do a VAT return monthly. If there is say £20,000 of VAT to be claimed back each month, then it is preferable to keep on top of this.
So, your VAT period is very likely to be quarterly or every three months. Yet there are times when it can be monthly, so it does vary.
What happens if you pay VAT late?
Paying your VAT late is not a positive choice to make. Eventually you will get penalties and you can lose standing with HMRC. VAT penalties or VAT surcharges can be added to your late taxes based on certain criteria.
The worst outcome though, is that they are more likely to enquire into your business dealings because of this. Having an HMRC enquiry is time consuming and can be stressful. It is best to avoid this if possible. Having accountants take care of your returns for you, will ensure that you do not make late payments.