Whether you’re just starting out or have been in business for a long time, Jon Essam & Co Ltd Chartered Accountants can help you meet your VAT responsibilities.
All businesses that provide “taxable” goods and services and whose taxable turnover exceeds the threshold must register for VAT.
Value Added Tax (VAT) is a tax on consumption levied in the United Kingdom by the government. It was introduced in 1973 and is the third largest source of government revenue after income tax and National Insurance. It is administered and collected by HM Revenue and Customs (HMRC).
VAT is an indirect tax because the tax is paid to the government by the seller (the business) rather than the person who ultimately bears the economic burden of the tax (the consumer).
Registered businesses must pay over to HMRC the VAT they have charged on their goods or service (known as output tax) but they may offset this with the VAT they have incurred on goods or services they have purchased (known as input tax).
A separate scheme, called The Flat Rate Scheme is also run by HMRC. This scheme allows a VAT registered business with a turnover of less than £150,000 per annum to pay a fixed percentage of its turnover to HMRC every 3 months. The scheme is designed to reduce red tape for small business and allow new companies to keep some of the VAT they charge to their customers.
Businesses that sell exempt goods or supplies, such as banks, may not register for VAT or reclaim VAT that they have incurred on purchases. Businesses that sell some exempt goods or supplies may not be able to reclaim the VAT on all of their purchases. However, businesses that sell zero-rated goods or supplies, such as food producers or bookseller, may reclaim all the VAT they have incurred on purchases.
Jon Essam & Co Ltd Chartered Accountants can take care of the preparation of your annual VAT return whether from your own bookkeeping records, or we can take care of your books and the VAT returns also. We always make every effort to ensure you do not overpay VAT and that you claim back as much VAT as possible.
As with other areas of tax, we can act as your Agent for VAT purposes and therefore correspond with HMRC or your behalf.
Late VAT registration or late VAT payments can lead to penalties and possibly interest being charged, and sometimes a full investigation by HMRC, so allowing Jon Essam & Co Ltd to take care of your VAT affairs not only gives you peace of mind, but it can avoid you making costly mistakes.
Please contact us on 01832 730280 for more information and to arrange help or advice on completion of your VAT returns.