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Britannic House, 279 Chanterlands Avenue, Hull, HU5 4DS

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01482 447 922

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VAT Returns

At Mark Evans & Co Chartered Certified Accountants, we have an efficient, hard working and approachable VAT return team which is headed up by Alicia and also includes Charlie, Lauren and Caitlin.

The growth that we, as a team, have achieved in terms of the quantity and quality of our VAT return submissions is something we are incredibly proud of and we feel with our experience, knowledge and highly competitive pricing we offer an excellent all round service which has communication, efficiency and friendliness at the forefront.

To find out more about our pricing please contact us on 01482447922 or get an estimate by using our instant quote tool here. Our VAT return submission starts from £85+VAT without software.

Did you know we offer a completely free face to face consultation? Click here to book.

Should I be VAT registered?

If your business sells supplies of taxable goods and/or services, as soon as your turnover (sales) reaches the statutory registration threshold you should register for VAT. This threshold usually increases each year and is currently £85,000 per annum. There are some industries which are exempt from VAT such as medical supplies.

What are the current VAT rates in the UK?

The standard rate of VAT in the UK is currently 20% and this is the rate charged on most purchases. However, there are other VAT rates which you need to be aware of as a business.

Reduced rate VAT is charged on sanitary products, energy saving measures and children’s car seats and is charged at 5%.

The zero rate – as the name suggests, charged at 0% – is applied to most food, books, newspapers and children’s clothes. Although no VAT is charged, the sale of zero rate goods and services still has to be recorded and reported on your VAT return.

On top of that, some items are ‘exempt’. These include postage stamps and financial and property transactions. As with zero rate items, no VAT is charged on these goods and services. However, these do not need to be counted in your taxable turnover.

EU law dictates that the standard rate of VAT in EU states should not be lower than 15%.

Can I register voluntarily for VAT?

Yes, you can register voluntarily, even if your turnover is below £85,000.

Not only can your VAT registration add credibility to your business, but it can also be advantageous if any of the following situations apply:

However, if none of the above apply then it may be better to delay registration until you have to

Our Advice regarding VAT Registration Issues:

Never add VAT to your sales invoices UNLESS you are registered – to do so is a criminal offence!

Avoid delay if you do need to register, otherwise you will incur penalties and interest charges, as well as having to account and pay over the VAT due from the time you should have been registered. Unfortunately, you may not be able to recover the outstanding VAT from your customers.

If you do find yourself in this situation please contact us immediately for assistance. The longer you delay the higher the penalties will be.

What is Making Tax Digital (MTD)?

Making Tax Digital is a new concept by the HMRC to make record keeping, accountancy, taxation and business administration as simple as possible by using digital software.

VAT-registered businesses with a taxable turnover above the VAT threshold (£85,000) are now required to follow the Making Tax Digital rules by keeping digital records and using software to submit their VAT returns.

We, as a business, promote Sage as the preferred software for our clients due to the favourable features and ease of use. We can, however, accept clients who use any of the accounting software’s and offer the same advice and service. Please speak to us about getting set up on software as we may be able to offer you a package with our fees. We can also offer training to our clients on how best to use the software for their business.

If you are below the VAT threshold you can voluntarily join the Making Tax Digital service now.

VAT-registered businesses with a taxable turnover below £85,000 will be required to follow Making Tax digital rules for their first return starting on or after April 2022.

Special Schemes

Most registered traders simply add VAT, where appropriate, to their sales and pay this over to HMRC after deducting any VAT input tax paid to suppliers. This is usually dealt with through a quarterly VAT return.

For small businesses this can cause cash flow problems. You may have to pay the VAT on sales invoices that have still not been paid by your customers.

HMRC have recognised this and have created a number of “Special Schemes” to alleviate some of the cash flow problems small business may face, especially when they are just starting-up.

What is cash accounting for VAT purposes?

Cash accounting is when you only need to pay VAT to HMRC when you are paid by your customers rather than the usual format of paying when you invoice. This is a significant advantage for businesses that have to grant extended payment terms to their customers. However, due to the nature of the scheme, you can only register for it if you have an annual turnover of up to £1,350,000. Please speak to us if this is of interest to you.

What is the Flat Rate Scheme (FRS) for VAT purposes?

The Flat Rate Scheme is a brilliant tool for some traders to use. It allows some traders that turnover more than £85,000 to pay a lesser rate of VAT on their sales to the HMRC but not claim any VAT back on company expenses (purchases). This scheme is very useful for businesses who are labour intensive which don’t require to buy materials for their business to trade. You still charge 20% VAT on your sales to the customer, but you only pay between 3-16.5% to the HMRC. You can only join the scheme if your turnover is less than £150,000 excluding VAT and must opt out of the scheme when your turnover reaches £230,000 including VAT. Please talk to us about it if you require any further assistance.

What is Annual Accounting for VAT purposes?

With this scheme you agree an annual liability, based on the previous year’s figures, and pay this over on an instalment basis. At the end of each year a final return is submitted and any balance due is paid or overpayment refunded. However, due to the nature of the scheme, you can only register for it if you have an annual turnover of up to £1,350,000. Please speak to us if this is of interest to you.

What are the Retailers Schemes for VAT purposes?

Ordinarily, businesses who are VAT registered keep detailed records of every transaction on accounting software. For retailers this could prove to be a time-consuming chore due to the amount of small transactions. To avoid this, affected businesses can use one of the Retailers Schemes.

There are 3 standard VAT retail schemes:

It must be noted that you cannot use the Flat Rate Scheme (FRS) with any of the retailers schemes and if you are a florist, caterer or pharmacist then there are separate rules.

At Mark Evans & Co, we can provide a full range of services to assist with VAT operation including:

Please feel free to contact us to discuss any of the VAT special schemes. We can offer an informal free chat or pop in to the office for a free face to face consultation. You can book here or get an free instant estimate for our fees here.

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