VAT can be difficult to understand even for us accountants, nevermind business owners. VAT returns can feel like a massive burden and if you make one mistake, the financial repercussions could be huge.
As VAT accountant experts, we can help you get and stay on track with your VAT obligations so you can get your attention back to the parts of your business that really matter. From getting your return done and filed digitally every quarter or month, to getting your business on the right VAT accounting scheme with HMRC.
Businesses with turnover of £85,000 or more must register for UK VAT and then charge the tax on the products or services they sell. They then pay the money back to HMRC in their return, which means you essentially collect VAT for the Treasury.
It’s not uncommon to get HMRC knocking, asking about a particular VAT return. When this happens, it’s almost always the result of poor accounting practices or filing. Prevent that from happening in the first place with us, but if there are problems with HMRC, we’ll have your back.
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Value Added Tax (VAT) is a consumption tax placed on a product whenever value is added at each stage of the supply chain, from production to the point of sale. The end consumer ultimately bears the cost, but businesses at each stage of the process are responsible for managing and remitting the correct amount to the government.
Accurate VAT accounting is pivotal for several reasons:
If your business’s taxable turnover exceeds the VAT threshold of £85,000 within any 12-month period, we are required to register for VAT. It’s important to keep a close eye on our turnover figures, as exceeding the threshold necessitates prompt registration. We can also opt to register for VAT voluntarily even if our turnover is below this number, a strategy that might benefit our business in certain circumstances.
To register our business for VAT, we follow a structured process:
By carefully following these steps and maintaining accurate records, we ensure our business complies with UK VAT regulations.
In our practice, we emphasise the importance of detailed record keeping and adherence to deadlines for VAT returns. We advocate the efficiency of online submission as the standard method for VAT compliance.
Proper record keeping is vital for accurate VAT returns. We ensure that all invoices and expenses related to VAT are meticulously recorded. This includes retaining all sales and purchase invoices, receipts, and proof of any imports or exports. Our detailed approach provides a solid foundation for correct VAT calculations and compliance.
VAT return deadlines are crucial, and we ensure our clients meet these dates promptly. Typically, VAT returns are due one month and seven days after the end of the accounting period. Staying ahead of these deadlines helps avoid penalties and maintains a good standing with the HMRC.
Submitting VAT returns online is mandatory under the Making Tax Digital initiative. We handle the online submission of VAT returns through authorised accounting software that interacts seamlessly with HMRC systems. The benefits include:
Handling VAT efficiently helps to maintain a healthy cash flow within a business. We focus on optimising both the payments you owe HMRC and the refunds you’re entitled to receive.
Output VAT is the tax a business charges on its sales of goods and services. To calculate output VAT correctly, the business should apply the current standard rate of 20% to the taxable supply. If your annual taxable income exceeds £85,000, it’s compulsory for us to register for VAT. It is also important for us to ensure that all invoices issued include the correct amount of VAT. For example:
Our entitlement to claim back VAT on business-related expenses can reduce the overall cost of purchases. When processing these claims, we ensure that each expense claim meets HMRC’s deductibility criteria.
Eligible expenses must be exclusively for business use and VAT receipts must be kept as evidence for HMRC.
If the input VAT—a tax paid on your business purchases—exceeds the output VAT within a given VAT period, you will be owed a VAT refund from HMRC. The process involves:
This is where systematic records of all your sales and purchases are important, as HMRC may require evidence when processing our refund.
By staying informed about VAT payment and reclaim processes, we maintain compliance with HMRC regulations and support our business’s financial stability.
We understand that managing Value Added Tax (VAT) can be complex and time-consuming. With the right VAT accountant on board and comprehensive planning and advice services, businesses in Newcastle can navigate VAT regulations effectively and confidently.
A competent VAT accountant is pivotal for ensuring that all VAT obligations are met, and liabilities are minimised. We are experienced accountants to assist in the accurate filing of VAT returns, offering insights into how VAT affects your specific business operations. Whether it’s a new venture or continuous corporate finance, a VAT accountant can guide you through each step from registering for VAT to dealing with disputes with HM Revenue & Customs (HMRC). As VAT accountants in Newcastle we can help both locally and nationally.
HM Revenue and Customs (HMRC) enforce strict rules for VAT returns and payments. Failure to comply can result in substantial penalties. These penalties are based on the behaviour causing the discrepancy and how much tax is owed. Should we make an error, disclosing it to HMRC voluntarily can sometimes lead to reduced penalties. Staying informed about VAT changes that might affect your business and maintaining accurate records are great ways to keep on top of this.
We emphasise the importance of utilising digital solutions for managing VAT affairs. Digital tools can simplify the VAT accounting process, ensuring compliance with HMRC’s Making Tax Digital (MTD) regulations. Online accounting software often features:
HMRC provides a range of support services to assist businesses with VAT. This includes:
For complex VAT matters, we recommend consulting HMRC’s specialist teams or using the VAT helpline for tailored advice.