Once registered you then need to keep certain records for VAT and provide details of your VAT registration on receipts to customers. You then need to submit a return quarterly to the HMRC, along with any payment you may owe them.
On your return you show all of the VAT you have collected from customers, but can take off any VAT the business has paid as a customer to other VAT registered business. You then pay the HMRC the difference. If you have been charged more VAT than you charged to customers – they’ll even give you a refund!
If you get agreement from the HMRC, you can join the VAT Annual Accounting Scheme, where only one return a year is required. But for this scheme you have to make payments on account throughout the year and – although less returns are due, you still have to keep adequate VAT records.
From April 2019 businesses over the VAT threshold will need to submit returns under MTD for VAT using approved accounting software. Please see here for more details. We can submit MTD for VAT returns for all of our VAT clients.
Setting up and operating a VAT account can seem daunting, and may people don’t know where to start? We can take away the headaches and show you it’s easy when you know how!
What VAT Services Do We Offer?
- 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 – something that you will need to keep by law.
- VAT Deregistration: If your company falls below the deregistration threshold, we can help you to deregister, and remove all of the undo all of the VAT recording in the business.
- 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 also liaise with the HMRC on your behalf if assigned us as your agent.
In addition to the above services, we can also 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. The Flat Rate Scheme can be used by most companies with a turnover below £150,000 – and requires a lot less paperwork, and can often save businesses money. But we would have to look at your individual business before we made any recommendations as it does not suit everybody, and you have to buy a certain amount of goods in order to use it!
We can also reduce you bills by making sure you are claiming for all the allowable VAT you spend in the business, especially pre-registration items.
Our rates are shown on the What We Charge page.
More information on VAT is available on the HMRC website here.
VAT: Key Questions Answered
1. VAT Return Dates
Your VAT return and (cleared) payment are due within 1 calendar month of the end of the period, although online filing and payment get an extra 7 days. Therefore if your period ends on 31st January, you have until 7th March to submit your return online and pay any tax due. Please note that the payment has to clear to their bank by this date – not just leave your bank!
2. VAT Late Penalties
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.
3. Current VAT Rates
As of March 2019 the VAT rate in the UK is 20%.