Any company with a turnover of more than £73,000 in any 12 mth period needs to register for VAT (Value Added Tax).
Once registered you then need to keep certain records for VAT, provide details of your VAT registration on receipts to customers, and submit a return quarterly to the HMRC, along with any payment you may owe them.
Setting up and operating a VAT account can seem daunting, and may people don't know where to start. Clear Cut Accounts can take away the headaches and show you it's easy when you know how!
VAT Registration: This includes registering you with the HMRC for VAT, and setting up your systems to correctly record your VAT input and output data. We will also set up your VAT Account, that you will need to keep by law.
VAT Returns: If you are registered for VAT we can compile and submit your VAT returns to HMRC for you every quarter.
For clients using any of our VAT services - we will be happy to explain the VAT process to you, and answer any VAT related queries at any time during the service term, over the phone or by e-mail. It's all part of the service!
We can liaise with the HMRC on your behalf if assigned as your agent.
We can look at ways in reducing the VAT you owe the HMRC by advising you on the best scheme for your company, from the Standard Method Scheme, Cash Accounting Scheme, the Flat Rate Scheme, the Annual Accounting Scheme or various other Retail and Specialist schemes.
We can also reduce you bills by making sure you are charging back for all the allowable VAT you spend in the business.
Our rates are shown on the What We Charge page.
There are 4 VAT periods each year:
1st April - 30th June
1st July - 30th September
1st October - 31st December
1st January - 31st March
Your VAT return and (cleared) payment are due within 1 calendar month of the end of the period, although online filing and payment can be given a few days longer.
Late returns are automatically penalised if late more than once in a set period. Penalties range from 2% of your VAT bill for a second offense, to 15% for a fifth offense.
Late payments are charged interest, but if you cannot afford to pay you should always submit your return, then contact the HMRC for help with payment - to minimise the charges you will incur.
As of 4th January 2011 the VAT rate in the UK changed from 17.5% to 20%.
All businesses charging VAT need to ensure that their systems were changed from this date, and that any calculation on their future VAT returns reflects this new rate. Flat rate scheme percentages have also been revised.