It is important to ensure that your financial records are accurate so that you can ensure you are registered for VAT should your turnover exceed the current threshold on a 12 month rolling basis.
HMRC are increasingly clamping down on traders who should be registered for VAT but have failed to do so, and can impose penalties. You can voluntarily register for VAT providing your business is making vatable sales. Once you are VAT registered, you will have to register for HMRC VAT online services as all VAT returns are submitted using the government gateway.
The deadline for submission and payment of a VAT return is one calendar month and 7 days after your period end date. For example, if your period end date is 31st May then submission and payment of your VAT return must be made by 7th July. Any payments due, must be made by this date otherwise you will incur penalties. Your VAT payment can be paid through your bank, online or by direct debit.
Calculating VAT can be complex. Most registered traders will simply add VAT where appropriate to their sales and pay this over to HMRC after deducting any VAT input tax paid to suppliers. If your annual VAT taxable turnover meets HMRC requirements, you could simplify your VAT accounting by applying to join the Flat Rate Scheme. The Flat Rate scheme is when your VAT payment is calculated using a percentage of your total VAT inclusive turnover. Your percentage is based on your business. Even though you are unable to reclaim input VAT on expenses, you can reclaim input VAT on capital goods if the purchase exceeds £2k in one single transaction.
Whether your VAT is calculated using standard accounting or flat rate, or if your businesses turnover is reaching the VAT threshold, we can offer you expert advice on all areas of VAT.
Please call us on 01227 277667 for further information or email us at firstname.lastname@example.org
MPH Accountants can relieve you of all the stress associated with completing HMRC compliance. We will ensure all of the requirements are met and the correct forms are submitted on time.01227 277 667