Services - VAT Returns

Small Business Accountants for VAT Returns

If your annual turnover is greater than £85,000 (current figure 2018), or you expect it to go over that figure in the next 30 days alone, you must register for VAT. However, many companies choose to voluntarily register for VAT - some do it to reclaim VAT on goods or services purchased, while others think it adds a level of professionalism to their operation.


But beware: late VAT registration, returns, payments and simple mistakes can all lead to penalties. VAT is a highly scrutinised area of tax; it is also a very complex space with many businesses often failing to pay the correct amount by unintentionally overpaying or underpaying.


Flat rate VAT

There is also a flat VAT rate scheme available to help small businesses to limit the administrative burden of VAT. If annual revenue is less than £150,000, a business can register for the flat rate scheme and pay a rate specific to its industry.


The scheme enables payment of a fixed, flat-rate percentage of gross turnover to determine how much VAT must be paid to HMRC quarterly. The business still charges VAT as normal and issues receipts to customers in the usual way, but the quarterly VAT return should be more straightforward. However, in many instances, if your business is registered for the flat rate scheme you will not be able to reclaim VAT on goods or services purchased.


How is VAT accounted for?

Usually, a business keeps a detailed record of all purchases and sales, and then uses this information to complete a quarterly VAT return detailing all output tax and input tax in that given quarter. Your output tax is the amount of VAT that you have charged your clients or customers on your invoices; your input tax is the amount of VAT you have been charged by your suppliers of goods and services or expenses incurred for your business.

A business files the return with HMRC and pays any VAT that’s due. If the business expenses outweigh sales, money may be due back to the company.


There are many other ways to account for VAT - including through a cash accounting scheme or by annual reporting - and your accountant for small business can help you to decide what will work best for your cash flow and business type.

Minimise the risk of errors

Using an accountant for small business can help you to avoid these errors. An expert can assist with VAT registration, VAT planning and completing VAT returns. Expert accountants can help you navigate through this VAT obstacle course by helping you to avoid having to pay any penalties and by helping you to reclaim any HMRC repayment that may be due to your company.


What else can a small business accountant help with?

1.     Advising on company formation

2.     Preparing statutory / annual accounts

3.     Preparing and filing corporation tax returns

4.     Filing the personal tax returns of the company’s directors

5.     Filing the annual confirmation statement


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