VAT Returns
VAT Accountant Services
VAT is a key aspect of accounting that can often be overlooked. It can quickly become a complicated matter, and many businesses may find they struggle to deal with the administrative burden that VAT can present.
Smaller businesses may not possess the resources or expertise to deal with the VAT process, and larger businesses can often encounter complicated VAT issues due to various exemptions and rates that may or may not apply.
An accountant will not only be able to help with the administrative demands, but can advise around your current VAT scheme and changes to the rules. It’s important to know how VAT affects your business, and to be prepared to deal with it.
Partnering with an accountant, whether it’s for your business or for individual needs is an important relationship and requires a good level of trust and assurance that your needs and concerns are met.
There may be many reasons why you feel a change is needed. It’s important your accountant understands your goals and what you want from them, and that they go the extra mile to deliver.
If you no longer feel your current arrangement works for you, Cutts & Co can not only provide the services you require but our team will work to make the transition a smooth and manageable process for all parties.
How does VAT Affect my Business?
You’ll be required to submit regular VAT returns into HMRC, typically every 3 months. These returns will consist of records of what you have bought and sold and you’ll see the amount of VAT you are owed or due to pay. If you are owed a tax return, HMRC will tell you how much you are able to reclaim.
It’s important to keep on top of your VAT records, as well as maintaining regular communication with HMRC as late returns can incur interest and fines. Cutts & Co provide a comprehensive VAT service and help many businesses deal with their VAT obligations.
VAT Accounting with Cutts & Co
With Cutts & Co, you’ll find accountants with years of experience helping businesses get to grips with their VAT obligations
- 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 changes to VAT. If this applies to you, you’ll need to keep digital versions of your VAT records and submit them via software.
You’ll need to be prepared for this ready for March 2022. Cutts & Co can not only offer advice and help getting ready for this change, but as Xero accounting software experts, we can help get you set-up with the systems you need to make your tax digital.
VAT Basics in the UK
Value Added Tax (VAT) is collected by HMRC, and is currently charged to the consumer of goods or services at a rate of 20%. This is not always a flat rate, and various exemptions or reduced-rates exist depending on the type of services or the sector.
Your business will need to be registered for VAT if your taxable turnover is currently beyond £85,000, however you can almost voluntarily register even if fall under this threshold. Once you are registered you will charge and pay VAT on the goods and services you both sell to consumers and buy into your company.
Whilst it’s important you find an accountant who can provide the services you want, if you are switching from an existing arrangement, we will work to make switching as easy as possible to ease what can be a disruptive time.
You’ll need to make sure you consider a few key areas when you decide to switch accountants to ensure the process is as smooth as possible.
Should You Consider the VAT Flat Rate Scheme?
Typically, your VAT rebate will be calculated using the VAT you have charged on your sales and minusing the amount you are able to reclaim on purchases you have made. If the amount you can reclaim is higher, you’ll get a refund and if it is lower, you’ll need to pay the difference.
With the Flat Rate Scheme, you will instead pay VAT as a percentage of your sales. This can often save businesses time, as you’ll avoid the hassle of calculating both your input and output VAT figures. You may even be able to save some money, as you’ll be able to keep the difference between what you have charged and what you pay to HMRC.
This scheme can be a great way for smaller businesses to avoid the burden of VAT calculations. Get in touch with our expert VAT accountants, and we’ll help you identify if this scheme is right for you and if you’ll be eligible.
How About a VAT Margin Scheme?
A Margin Scheme can be used on the sale of second hand goods such as antiques and works of art. A Margin Scheme taxes VAT on the difference between what you paid for something and what you then sold it for, instead of taxing you on the full selling price. Currently, you’ll be charged at 16.67%, the equivalent of 1/6th of the difference.
Our team can assist in identifying eligible items, and support in compiling the necessary records to ensure your business and cash flow continues to run smoothly without any penalties.
