VAT Returns
VAT Accountant Services
Managing VAT: A Key Aspect of Accounting for Businesses of All Sizes
VAT is a critical element of accounting that is often overlooked. However, it can quickly become a complex matter, with many businesses struggling to manage the administrative burden it presents. Smaller businesses may lack the resources or expertise to handle VAT processes, while larger businesses can face complicated VAT issues due to various exemptions and differing rates.
A professional accountant can not only assist with the administrative demands of VAT but also provide valuable advice on your current VAT scheme and any changes to the rules. It’s vital to understand how VAT affects your business and to be well-prepared to manage it effectively.
Partnering with the right accountant, whether for business or individual needs, is crucial and requires a high level of trust and confidence that your requirements and concerns are met. There are many reasons you might feel the need for change, and it’s essential that your accountant understands your goals and goes the extra mile to deliver results.
If you feel your current arrangement is no longer serving you, Cutts & Co not only offers the services you need but ensures a smooth and manageable transition for all parties involved.
How does VAT Affect my Business?
You’ll be required to submit regular VAT returns to HMRC, typically every three months. These returns will include records of your business transactions, detailing what you have bought and sold, and will show the amount of VAT you are owed or need to pay. If you are due a tax refund, HMRC will inform you of the amount you can reclaim.
Staying on top of your VAT records and maintaining regular communication with HMRC is crucial, as late returns can result in interest and fines. Cutts & Co offers a comprehensive VAT service, assisting many businesses in managing their VAT obligations effectively.
VAT Accounting with Cutts & Co
With Cutts & Co, you’ll find accountants with years of experience in helping businesses navigate and manage their VAT obligations effectively.
- Advising on your options and the most efficient scheme for you
- Taking care of completing your VAT returns
- Managing communication with HMRC
- Advising on any upcoming changes
- Advise on Flat Rate Schemes, Margin Schemes and sector specific schemes
- Getting your business ready for Make Tax Digital changes
Preparing for Make Tax Digital (MTD) Changes
HMRC now requires VAT-registered businesses to keep digital records as part of the Make Tax Digital (MTD) initiative. If this applies to you, you’ll need to maintain digital versions of your VAT records and submit them via approved software.
With MTD now fully in effect, it’s essential to ensure your business is compliant. Cutts & Co offers expert advice to help you stay ahead of these changes. As Xero accounting software specialists, we can assist in setting up the systems you need to manage your VAT records digitally and stay compliant with HMRC’s requirements.
VAT Basics in the UK
Value Added Tax (VAT) is collected by HMRC and is currently charged to consumers of goods or services at a standard rate of 20%. However, this is not always a flat rate, as various exemptions or reduced rates exist depending on the type of services or sector involved.
Your business must be registered for VAT if your taxable turnover exceeds £85,000, though you can also voluntarily register if your turnover is below this threshold. Once registered, you will be required to charge and pay VAT on the goods and services you sell to consumers and purchase for your company.
When considering switching accountants, it’s crucial to find a partner who can meet your service needs. At Cutts & Co, we strive to make the transition as smooth as possible, minimising disruption during what can often be a challenging time.
Ensure you consider a few key areas to facilitate a seamless switch when changing accountants, so your business continues to run efficiently.
Should You Consider the VAT Flat Rate Scheme?
Typically, your VAT rebate is calculated by subtracting the VAT you can reclaim on purchases from the VAT you have charged on your sales. If the reclaimable amount is higher, you’ll receive a refund; if it’s lower, you’ll need to pay the difference to HMRC.
With the Flat Rate Scheme, you pay VAT as a fixed percentage of your sales. This can save businesses time by eliminating the need to calculate both input and output VAT figures. Additionally, you may save money by keeping the difference between what you’ve charged and what you owe HMRC.
This scheme can be an excellent option for smaller businesses looking to simplify their VAT obligations. Get in touch with our expert VAT accountants at Cutts & Co, and we’ll help you determine if this scheme is right for you and if you’re eligible.
How About a VAT Margin Scheme?
The Margin Scheme can be applied to the sale of second-hand goods, such as antiques and works of art. Under this scheme, VAT is charged on the difference between the price you paid for an item and the price at which you sold it, rather than on the full selling price. Currently, the VAT rate for this scheme is set at 16.67%, equivalent to 1/6th of the margin.
Our expert team at Cutts & Co can assist in identifying eligible items and support you in compiling the necessary records to ensure your business and cash flow run smoothly, avoiding any penalties.
