Need an Experienced VAT Return Accountant? Our VAT Services Include Registration, Advice & Quarterly Returns
The three letters V-A-T cause many people even more anxiety than the other little word, tax – but it really doesn’t have to be that way. Your accountancy team and business advisors should provide you with the right help, advice and information to allow you to get on with your day-to-day and not worry about the complexities of VAT returns. If you currently don’t have this confidence in the fulfilment of your VAT accounts, especially with the upcoming ‘Making Tax Digital’ implementation in April 2019, please call us to arrange a free new client consultation.
Our VAT Services
We are based in Tamworth, close to Birmingham, Sutton Coldfield and Lichfield, but deliver VAT services to SMEs across the country. Our VAT services are as diverse as our clients’ needs, and our bespoke packages can incorporate VAT registration, quarterly VAT Returns, help on reducing VAT outgoings and bookkeeping, and VAT housekeeping is also included in our two fixed fee packages:
What is VAT?
VAT is an acronym for Value Added Tax, which is tax charged on (most) items bought and is collected by the Government via businesses.
Making Tax Digital (MTD)
While the new online submission system does affect those businesses who are registered for VAT first, the MTD plans are much more than that, and we’d advise you keep abreast of our Making Tax Digital Overview page.
You will continue to submit quarterly VAT returns under MTD, but the way the account records need to get to HMRC is what is changing from 1 April 2019. Whether you use a spreadsheet or not, the data will need to be submitted electronically, and a cloud accounting system, such as our preferred cloud software, Xero, will help you do that in a simple, time and cost effective manner.
Which businesses pay VAT?
If a company’s turnover is more than £85,000 (on a 12 month rolling basis), it must be VAT registered. It must then charge VAT on the products and services it sells, and pay it on those bought. Once the annual turnover has exceeded the threshold, you have 30 days to complete the registration, or the company could be fined. If turnover is less than this, businesses can voluntarily register for VAT; this is beneficial if the company pays out more on VAT from purchases than it collects from customers.
If you’re on the cusp of reaching the threshold, or you require help looking at your accounts to see what action would be most advantageous, please contact us to arrange a free consultation about out VAT Registration Services. We can appraise your position, help and advise, and undertake the registration on your behalf.
What is required of a VAT registered business?
VAT must be charged for on goods or services
VAT paid on business-related goods or services can be reclaimed
VAT registered businesses have to be much more careful with their cash flow planning. Registering to charge VAT, and then ensuring funds are available to pay HMRC in a timely manner can be a challenge in the first year. Nevertheless, good forecasting and tax planning can prepare you and your business for effective and positive changes, and we’ve given VAT help and advice to many companies through periods of growth, when VAT becomes applicable.
What records must be kept?
> All sales and purchases
> A separate VAT account, summarising all in and outgoing VAT
> VAT invoices correctly detailing all requisites
If you are preparing to become VAT registered, aren’t sure how best to prepare or you’ve found you are unexpectedly reaching the threshold, let our expert team guide you towards creating efficient processes and help you keep on top of the legislative requirements. When it comes to tax liabilities, having peace of mind is one of the greatest positions to be in as a business owner - we can take care of dotting the ‘i’s and crossing the ‘t’s so you can focus on making your business even more of a success.
How is VAT settled?
A VAT return must be completed by the business every quarter, which details the outlay and income. The VAT collected from customers during this time is paid to HMRC, minus the VAT that has been paid out on purchases during the same accounting period. Plus, as mentioned above, Making Tax Digital requires VAT registered businesses submit their VAT Returns digitally from 1 April 2019.
What does a regular VAT Return comprise?
> Sales and purchase records for the three month accounting period
> The total amount of VAT collected and owed to HMRC
> The total amount of VAT paid on purchases
> The amount that you owe to HMRC or the amount of the VAT refund owed to you from HMRC
If you are VAT registered you must submit every VAT Return, even if no payment or refund is due, and you must also keep your VAT Records for 6 years.
We undertake quarterly VAT Returns for a large proportion of our clients, and have worked with businesses of all sizes on VAT registration, helping to put resources in place and seamless switches to electronic bookkeeping systems. Whether your processes need an overhaul or you’re interested in the cost differential of outsourcing your bookkeeping and financial requirements to an accounts like Adams Moore, contact us to set up a meeting in our Tamworth office or over the phone.
What is the rate of VAT?
Since 2011, the standard VAT rate has been set at 20%, but depending on the sector your business operates in, there could be a number of exceptions and other rates you need to be aware of.
‘Reduced Rates of VAT’ are applied to items such as sanitary and maternity pads, energy-saving materials installed residential buildings, protective and safety equipment, and mobility aids for the elderly. Many items are charged at the ‘Zero VAT Rate’, and it is crucial to charge 0% rather than exclude any amount from records and VAT returns. These including building services for disabled people, many goods and services for charities, admission charges to cultural events, printing of brochures and aircraft repairs. ‘Exempt from VAT’ items like postage and care provided by a nursing home do not need to be included in VAT records. A full list of rates of VAT on different goods and services can be found here.
Flat Rate VAT
As the name suggests, a fixed rate of VAT is paid to HMRC, instead of the difference between the VAT charged and paid. Businesses can’t claim back the VAT on any of their purchases, with the exception of some capital assets over £2k, but they do get to keep any VAT payments charged to customers or clients. The company has to apply to HMRC to be considered for the flat rate, must have a turnover less than £150k, and we would advise you discuss the option with your accountant to ensure it is a financially favourable move.
When to charge VAT?
Businesses must collect VAT at the point of sale. So it should be rung through the till and be itemised on the receipt or be included on a sales invoice.
What should be included on a VAT Invoice or Sales Receipt?
> An invoice number and date (and the date the items/services were supplied if different)
> The name, address and VAT registration number of your business
> The customer or client’s name and address
> A description of the goods and services covered
> For each item the unit price excluding VAT, the quantity, the VAT rate, the total excluding VAT, the amount of VAT, and the total including VAT must be detailed
Checking the amount of VAT has never been easier with online calculators – try our VAT Calculator here.
Businesses not on the Flat Rate Scheme can reclaim VAT on all expenditure, except entertainment expenses, so registering for VAT before reaching a turnover of £85,000 could be profitable for your business. If you’d like to investigate the opportunities best for your business, have recently become VAT registered or are considering engaging a new VAT return accountant, please contact us and we look forward to arranging a free advisory consultation.