VAT

What is VAT?

VAT;  Value Added Tax is a tax that is levied on most goods and services you buy and sell. If your revenue is lower than £90,000, you pay VAT on most purchases, but you will not be charging VAT on your sales. You are just like everyone paying VAT on a pint of milk, you think no more about it.

When your revenue reaches £90,000, you are required to register your business entity for VAT. Once your company is VAT registered, you will charge VAT on all of your sales, and reclaim the VAT you pay on your business related purchases. Your VAT Return is essentially a log of VAT in and VAT out.

Sounds simple, however VAT is complex, with ever changing rules and legislation.

Where People go Wrong…

The mistake I see people making is not planning ahead, they put off considering VAT until they reach the £90,000 threshold and then panic to get registered before they need to submit their first VAT return. This is an easy mistake to make as the VAT calculations work differently in that it is done on a “rolling year” basis rather than a set date.  Doing so they don’t allocate enough time to properly assess which scheme is best for their business.

We understand the complexities and we plan ahead! Our priority is taking the risk and pain away from you, providing you with that crucial peace of mind.

How We Work:

Before registering for VAT, we review the various VAT schemes to recommend the one that aligns best to your business. We then discuss with you, so you can make an informed decision as to which scheme you choose. We prepare and lodge the relevant paperwork with HMRC.

Once registered, we work with you to understand your business and ensure your invoices raised meet the VAT invoice regulations, and for invoices paid we check appropriate VAT rate applied and the invoices meet requirements for reclaiming. We work with you along the way, ensuring that you understand the VAT positions and impact it has on your business.

When this set-up work is done, the process runs very smoothly. You raise your sales invoices on our accountancy software Xero. Purchase invoices you simply send to our invoicing capture software, Apron. This means that all relevant information is captured during the year and there is no last minute collating receipts at the end of the year.

Finally we submit your VAT return to HMRC.