All businesses must register for VAT if they have an annual turnover of more than the current VAT threshold, or if they think they will soon go over this limit.

Once you’ve registered your business for VAT you must:

• Charge VAT on the goods or services you sell (whether you sell to individual customers or to other businesses,
• Include your VAT number on your invoices,
• Pay VAT on the goods and services you buy for your businesses, and
• Prepare and file a VAT return to HMRC each quarter to show how much VAT you have charged (known as output tax) and how much VAT you have paid (known as input tax).

If your output tax exceeds your input tax, you must pay the difference to HMRC. On the other hand, if your input tax exceeds your output tax, you can claim a refund on the difference.

There are three different rates of VAT that can be charged – standard rate, reduced rate and zero rate. Some goods and services are exempt or partially exempt from VAT. There are also specific VAT rules that apply to certain trades and industries. You need to make sure you are charging the right amount of VAT to avoid unexpected demands from HMRC for unpaid tax.

If you are VAT registered and your turnover falls below the threshold, it might be to your advantage to de-register for VAT. Your accountant should keep an eye on this for you and advise you on your best course of action.

Our comprehensive VAT service offering covers the following areas:

Transaction VAT advice

Day-to-day VAT assistance to help you with your book keeping and optimize your cash flow.

• VAT registration and deregistration;
• Completing your VAT return or reviewing your VAT return before you file it;
• Advice on when to pay VAT;
• Bad debt relief;
• Checking VAT liability on supplies made.

VAT planning

We help you structure your transactions to ensure you pay minimum amount of VAT without damaging your reputation with HMRC.

Risk management for VAT

Well planned risk management is crucial, as it reduces the risk of errors and the resulting penalties and charges. It addresses areas such as:

• When advice needs to be sought;
• How review procedures are recorded;
• How staff are recruited and trained;
• How to deal with unexpected events, such as the sudden illness of a key staff member;
• When to seek HMRC clearance.