VAT Processing and Returns
Putting off VAT registration can be expensive as you may have to pay the HMRC the tax that you should have collected plus a fine as well. There are severe penalties for late registration and for VAT evasion.
Once your turnover reaches the threshold (currently £85,000) – or will within 30 days – you must register for VAT. To work out whether you have to register, you can ignore the value of any capital assets – buildings, vehicles or equipment – you have sold and any exempt supplies.
VAT rates vary according to the goods and services supplied. There are four categories:
- Exempt supplies. Including education, finance, insurance, and the services of doctors and dentists. There is no VAT charged on exempt supplies.
- Zero rate. Charged on most food (but not restaurant or takeaway meals), children’s shoes and clothing, prescriptions, books and newspapers, new house sales and prescriptions.
- Reduced rate. A rate of 5% that includes fuel and power used in homes and by charities.
- Standard rate: Currently 20% and is applied to all goods and services which do not fall into the other three categories.
Most businesses collect more VAT from their customers than they pay to their suppliers. They then fill in a quarterly VAT return, and pay the surplus to HMRC. If you need to register, you have to account for VAT whenever you supply goods and services to your customers.
How Assent Accountants Can Help
Once your turnover reaches the threshold (currently £85,000) – or will within 30 days – you must register for VAT. We can help you with your VAT Returns.
Value Added Tax can impose significant costs to a business so we offer a fully range of VAT advisory services to support any VAT related queries
We are flexible depending on the support you want us to give you. We can support if you need help processing your VAT return alternatively we can prepare and submit the return for your business.
We use various accounting software packages, which can offer a simple and practical solution when preparing and submitting your VAT return.
Whether you are a new business or a growing business looking for advice on VAT schemes or VAT planning, we can help.