As your business grows you may have to start charging VAT on your services. You must register if any of the following apply;

  • your VAT taxable turnover is more than £85,000 in any 12 month period, or
  • you receive goods from the EU worth £85,000 or more, or
  • you expect to go over the threshold in a single 30 day period.

We can help you determine if you need to register and take care of any registration with HMRC for you.

You don’t have long and must register within 30 days of your business turnover going over the threshold. If you register late you will have to pay what you owe from when you should have registered.

You may also have to pay a penalty depending on how much you owe and how late you registered.

You may be able to get a VAT exception if your turnover goes over the threshold only temporarily and is likely to be less than £83,000 (de-registration threshold) in the next 12 months.

We can help you to apply for an exception with HMRC.

You usually need to submit a VAT return to HMRC every 3 months. This period of time is known as the VAT accounting period.

The VAT return and any payment are due 1 month and 7 days after each accounting period. Over a year this would be four VAT returns and four payments.

Alternatively if your VAT taxable turnover is less than £1.35m you can join the VAT annual accounting scheme. You still have to make regular payments but only have to submit one VAT return per year.

Usually the VAT you pay or reclaim is the difference between the VAT you charged your customers and the VAT you paid on your purchases.

The VAT flat rate scheme is a lot simpler and is calculated as a fixed percentage on your VAT taxable income. This makes it easier for you to plan for your VAT tax bill and also means less paperwork.

To join this scheme your VAT taxable turnover needs to be less than £150,000 (excluding VAT).

Usually you have to pay over any VAT to HMRC even if your customers have not paid you yet for your invoices. This could lead to a temporary shortage of cash in your business.

With the VAT Cash Accounting Scheme you only pay the VAT on invoices your customers have paid and only reclaim VAT on purchases paid by you.

We can advise on the VAT scheme best for you.

Please use the contact form to find how we can help you with your VAT requirements.

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