VAT Returns
Businesses must register for Value Added Tax (VAT) when there turnover reaches a certain threshold (currently £85,000) in a 12 month period.
You can register voluntarily before you reach this threshold, but it’s always worth getting advice on whether you should do this. A VAT return needs to filed periodically (usually quarterly) showing the totals for this period, and then this amount is paid across to HMRC.
It’s fairly straightforward to register for VAT, but it’s then essential that you keep proper records to ensure you keep on top of filing and payments. There are lots of cloud solutions available, but we recommend using Xero as it easily scales with you and is very user friendly.
You will need to ensure that whatever software you use it has the VAT element set up correctly. This can help eliminate a lot of costly mistakes, as the software will automatically default to the correct VAT codes for each expense category. It will still need reviewing, but this can be a big time saver and massively simplifies your book keeping.
There are several VAT schemes that you can join – some good, some not so good! Not all schemes are available to all entities, so you definitely need to get some advice on this.
The good news is that we are VAT experts, and are happy to share our expertise with you to help ensure you’re on the best scheme for your business. Whilst you can manage VAT submissions yourself, it’s well worth the small additional cost to have it reviewed by one of our VAT experts. The penalties for filing incorrectly can be quite harsh, and we can give you the peace of mind of knowing that everything has been done correctly with your VAT returns.
Contact Abacus Accountancy
Please get in touch with any questions around VAT and how this should work in your business.