VAT Accountants Services
for your small business
Our skilled and seasoned team will take care of your VAT reporting and returns throughout the year, handling everything on your behalf.
With a combination of reliable accounting software, knowledgeable tax experts, and a committed client manager, we offer an ideal solution to help you maintain compliance with HMRC's Making Tax Digital regulations.
What is VAT
When purchasing goods or services, Value Added Tax (VAT) is a mandatory tax that must be paid. If you operate a business, you might have an obligation to register for and collect VAT.
Companies that generate a turnover of over £85,000 (which is known as the VAT registration threshold) are required to register for VAT, charge VAT on the goods and services they sell, and pay this amount to HMRC when filing their quarterly return.
VAT in the UK is typically charged at:
- 20% on goods and services
- 5% is applied to some health, energy, heating, and protective products and services.
- 0% is applied to a range of products and services to do with health, building, publishing, and kids’ clothing.
Certain goods and services fall outside the scope of Value Added Tax (VAT), such as stamps, financial transactions, and property transactions. In such cases, businesses determine the VAT they should charge based on the nature of their sales and their revenue.
Your VAT registration number
Your business is assigned a distinctive nine-digit number by the government, which begins with ‘GB’. This number, known as the company number, is exclusively allocated to VAT-registered businesses and is featured on your registration certificate.
The certificate also specifies the date when your company crossed the registration threshold and the deadline for submitting your initial VAT return.
What is my VAT payment date?
By accessing your VAT online account through the Government Gateway, you can verify the deadlines for submitting your VAT Return and making payments.
The information available in your VAT online account includes the dates by which you must submit your VAT Returns and the dates by which payments should be received and processed by HMRC.
Typically, the deadline for submitting your VAT Return and making payments are identical and are determined as one month and seven days after the end of your accounting period.
For instance, if your VAT period concludes on March 31st, the payment for the owed VAT must be made by May 7th. However, if you choose to pay through direct debit, the payment is generally withdrawn three days after the VAT return deadline.
Online VAT calculator
To find out the deadline for making your VAT payment for the ongoing accounting period, you can check the HMRC website. However, if you make payments on account or participate in the annual accounting scheme, you won’t be able to utilize this calculator. For submitting your VAT return and maintaining digital records, it’s advisable to use an accounting software provider that is approved by the authorities.
How does VAT work?
As a business owner, you’re required to submit VAT returns to HMRC periodically – monthly, quarterly, or annually. These returns provide a summary of the VAT charged on sales and the VAT paid on expenses during the specified timeframe. In case the VAT collected surpasses the VAT paid, you must pay the balance to HMRC. Conversely, if the VAT paid is greater, HMRC will reimburse you for the difference.
Paying your bill
When it comes to paying your taxes to HMRC, you can only do so through direct debit or internet banking; they do not accept cheque payments. If you encounter any difficulties while making payments, it’s crucial to get in touch with them immediately.
Is your business ready for making tax digital for VAT?
The implementation of Making Tax Digital (MTD) has brought about changes in the way UK businesses manage their tax obligations.
As of now, VAT-registered companies are required to maintain digital records and submit their VAT returns electronically.
To comply with these regulations, we utilize approved accounting software like Xero, QuickBooks, and FreeAgent, and we’re fully accredited and compliant with MTD guidelines. Our team will assist you in filing your VAT returns online and offer expert advice and support concerning VAT matters as and when required.
Need a VAT service for your business?
Get in touch with one of our experts!
EU eCommerce VAT changes
The EU has introduced the “EU VAT Ecommerce Package” to facilitate VAT reporting for individual sellers and shift VAT responsibilities onto marketplaces, as online businesses have experienced significant sales growth in the past 18 months.
As part of this package, B2C European sellers can benefit from the “One Stop Shop” (OSS) and “Import One Stop Shop” (IOSS), which aim to simplify VAT calculation and payment.
For vendors who offer imported goods to EU buyers, the IOSS streamlines the collection, declaration, and payment of VAT. If you require accounting assistance or further guidance on International VAT for your eCommerce business, please click the button below.
Our VAT registration service
Your assigned accounting manager will take care of all VAT-related matters, such as evaluating your company’s tax effectiveness and recommending changes if needed, registering your business for the appropriate VAT scheme, handling the registration procedure, and updating you on any new laws and regulations.
While it is not mandatory to register for VAT until your revenues reach £85k, if your business is expanding and expected to reach this threshold soon, it is recommended that you register now to stay ahead of the game. This will give you complete peace of mind to run and grow your business.
Our VAT returns service
At our company, we believe in being proactive and preparing everything for submission well ahead of your VAT deadlines. While there may be some paperwork involved, don’t worry, we’re here to handle it all for you!
We’ll also provide you with the necessary VAT returns reports and inform you of the payment amount required. In addition, based on your accounts and their standing, we’ll guide you on EU/EC sales.
Managing your finances gives us the expertise to advise you on related matters, ensuring that all of your decisions lead to the growth and prosperity of your business.
Taxcellent Services
Launch your new venture with confidence and peace of mind with our comprehensive range of accounting and tax services.
Why choose us
Selecting the appropriate VAT plan can have a significant impact on your business. By outlining your products, services, and projected earnings, you can determine which scheme would best suit your enterprise, resulting in a reduction in your VAT rate.
Once you’ve identified the most suitable scheme, we’ll assist you with the registration process, recommend switching to a more tax-efficient scheme, and keep you informed about any changes in VAT regulations.
Upon subscribing to any of our pricing plans, you will gain immediate access to our award-winning accounting software packages Xero, QuickBooks, and FreeAgent. We will also manage the filing of your digital VAT return.
Moreover, as Institute of Chartered Accountants members, we will offer professional guidance and support whenever you need it, ensuring that your business complies with the latest government initiative.
At Taxcellent, we provide skilled and knowledgeable accountants who work tirelessly to deliver VAT reporting, guaranteeing that you are compliant and identifying any potential risks. Our team will decrease your liabilities and compliance concerns by ensuring that all aspects of your VAT transactions are accurately recorded, and all month-end procedures are completed promptly.
| Category of Business | Current VAT Flat rate (%) | |
|---|---|---|
|
Accountancy or book keeping |
14.5 |
|
|
Catering Services Including restaurants
& takeaways |
12.5
|
|
|
Entertainment or Joumalism |
12.5
|
|
|
Financial Services |
13.5
|
|
|
Hotel or accommodation |
10.5
|
|
|
Legal Services |
14.5
|
|
|
Publishing |
11 |
|
|
Social Work |
11 |
|
|
IT Consultants |
14.5 |
|
Flat Rate VAT Scheme
The VAT Flat Rate Scheme was implemented to ensure that businesses pay roughly the same amount of VAT while minimizing the amount of paperwork required compared to other VAT schemes.
The VAT payment to HMRC is based on your business type and your customer pricing. You keep the difference between your charges and the amount paid to HMRC. With certain capital assets over £2,000, you may reclaim VAT paid, but not for regular purchases.
For instance, stores selling food, newspapers, tobacco, or children’s clothes are charged a flat rate of 4%, while accountants, bookkeepers, computer/IT consultants, structural engineers, architects, and surveyors are charged a rate of 14.5%.
Standard VAT accounting
Conventional VAT accounting dictates that financial transactions are recorded in real-time, irrespective of payment timelines.
This could adversely impact your business’s cash flow as VAT must be paid to HMRC for goods or services sold, even if payment hasn’t been received yet.
However, if you haven’t yet paid for goods received, you may reclaim the VAT charged on the invoice, improving your cash flow.
Cash VAT accounting
If you receive immediate payments from your clients but make purchases on credit, using the cash basis method may be more advantageous as it allows for quicker VAT recovery.
However, if your customers take a long time to pay but you pay your suppliers promptly, then using the invoice basis method may be more beneficial.
FAQ's
As a VAT registered entity, your income and expenses are typically presented as net amounts, meaning any VAT charged or incurred is excluded from the profit and loss statement.
Additionally, the profit and loss statement only reflects revenue transactions that pertain to the commercial operations of your small business.
You usually submit a VAT Return to HM Revenue and Customs (HMRC) every 3 months. This period is known as your ‘accounting period.
The VAT Return records items for the accounting period such as your total sales and purchases.
The most common set of quarterly VAT return dates are:
- 1st January – 31st March.
- 1st April – 30th June.
- 1st July – 30th September.
- 1st October – 31st December.
To file your VAT return, you will require a VAT number and an online VAT account. You have the option of using either HMRC’s free online service or commercial accounting software. However, if you have enrolled in ‘Making Tax Digital for VAT,’ you are not permitted to utilize your online account for submitting your VAT return.
If your VAT period ends say on 31 March requires payment of the VAT liability by 7th May. However, if your business registered for paying by direct debit, payments are usually taken 3 days after VAT return deadline.
If you wish to switch from submitting VAT returns every quarter to every month, you can either access your VAT online services account and choose ‘change registration details’ or fill out form VAT484 and send it to HMRC via mail.
If you are late filing a VAT return or making a payment to HMRC, you will enter into a 12-month probation period known as a ‘surcharge period’. If you file any further late returns or make more late payments during this period, you will incur a penalty and the surcharge period will be reset for a further 12 months.
You can generally reclaim VAT on goods you bought up to 4 years before you registered for VAT and services you bought up to 6 months before you registered as long as the following conditions are met; The goods were bought by you as the entity that is now registered for VAT.