VAT
VAT Registration & Returns
VAT SCHEMES
Standard VAT
• Standard VAT is 20%. You charge this amount on your VATable supplies and can claim it back on most VATable purchases made. The difference is paid or reclaimed to/from HMRC.
• VAT returns are submitted quarterly.
• This is completed online and must show output and input tax for that quarter.
Flat Rate VAT
• An incentive to simplify taxes allowing you to charge VAT on invoices at 20% but only pay HMRC at a lower rate, depending on your trade.
• For example, Advertising is 11%, Catering is 12.5% & Building and Construction is 9.5% as at 2024.
• To join, your VAT turnover must be £150,000 or less and you must apply.
• A downside. You cannot reclaim VAT on purchases, except for certain Capital assets over £2,000.
• Certain thresholds exist and your accountant will aid you with staying within these boundaries.
Cash Accounting
• If your turnover is more than £1.35 million you CANNOT use this scheme.
• This scheme is advantages for businesses that pay VAT only when clients have paid for goods/services.
• However, VAT cannot be claimed for goods bought for the company if they have not yet been paid for.
• This is completed online and must show output and input tax for that quarter.
• You must leave the scheme when you reach a certain turnover that we can advise you of.
Margin Scheme for retail
• A scheme for those in retail who sell Art, Antiques, Collectors items or second-hand goods.
• You pay VAT on the value you add to the goods you sell rather than on the full selling price of each item.
• For example. You add 50% on top of what you bought the goods for, you will pay VAT on the amount added.
• No need for registration.
• You cannot claim VAT on overheads using this scheme.
Retail Scheme
• For goods sold inclusive of VAT, you must deduct the VAT you have to record. For goods sold exclusive of VAT, you must add it.
• VAT retail schemes can make calculating your VAT simpler. Instead of calculating the VAT for each sale you make, you do it once with each VAT return.
•You can join a retail scheme at the beginning of any VAT period. You don’t need to tell HMRC.
• You can join a retail scheme at the beginning of any VAT period. You don’t need to tell HMRC.
• You can leave a scheme at the end of any VAT period. If your turnover rises above £130 million you’ll have to leave the scheme immediately.
• There are 3 standard VAT retail schemes, Point of Sale, Apportionment and Direct Calculation which we can help with.
The lowdown on VAT...
Why use an Accountant to do your VAT Returns?
When a business reaches £90,000 turnover, they need to register for VAT with HMRC and submit quarterly VAT returns.
If you're already a client of ours for bookkeeping, we'll already be keeping an eye on your turnover for you to ensure you register in time.
Although you could complete your VAT return yourself, it is not as simple as you might think.
There are many VAT rules for whether you sell goods and services, hire or loan goods to someone and selling business assets. Some services are VAT-exempt while others have reduced VAT rates of 0% or 5% .
The Government has also brought in the recent reverse charge VAT rules for the construction industry which took effect from 1st March 2021. It affects the way in which VAT is collected. It applies to individuals or business registered for VAT in the UK.
The sooner you are able to get a grasp of HMRC’s VAT rules the better it will be for your business. We can provide advice on your VAT liabilities, and specifically on the VAT implications of any transactions.
Choosing the right VAT scheme can make a huge difference to your business. There are a number of factors you need to consider:
- Nature of your business
- Your products and services
- Expected revenues
– all of which can determine which is the right VAT scheme for you and your business.
With the introduction of Making Tax Digital for VAT, you may not be confident in registering yourself, so you may need a helping hand to guide you in the right direction.
As a business, your responsibility is to register with HMRC. To do this, you will need a Government Gateway ID and password, VAT number and business email, plus the last VAT return you submitted. In addition to this, a sole trader would need their National Insurance number, and partnerships or limited companies will need their UTR.
Your VAT Accountants in Rutland
We prepare VAT reporting and your returns on your behalf. We will submit it online; you just need to pay any amount due to HMRC each quarter.
Once you have chosen the right VAT scheme, we will then help you through the registration process and advise you on how to switch if you are moving to a more tax-efficient scheme. We will also help you stay on top of all the VAT laws and regulations.
We offer very competitively priced packages.
For our complete VAT returns & advice service please get in touch
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