We are all aware of having to pay VAT, but when you run a business you are responsible for making sure you stay within HMRC’s rules for VAT.
There are different rates of VAT and different schemes and which scheme applies to you is dependent on your business and its trading style.
For example, there are cash accounting schemes, treatment of VAT within the EU schemes which differs to treatment of VAT outside of the EU.
There are also different VAT rates for different types of goods and services.
For example, there is the standard rate VAT – which is currently 20%, reduced rate VAT – 5% and VAT exempt goods which attract no VAT. – 0%
You also have the option of registering for VAT before your reach the compulsory threshold for taxable turnover for the previous 12 months, which currently stands at £73,000.00, this can sometimes be beneficial to your business as you may be able to reclaim VAT on purchases.
HMRC also require you to register for VAT if you think your taxable turnover may go over the threshold in the next 30 days, or you take over a VAT-registered business as a going concern.
Sounds complicated – not for us. We routinely manage VAT registration and VAT returns for our clients, by allowing us to deal with this you always have an expert on hand who is up to date with current legislation.