VAT Registration & VAT Returns

Handle VAT without hassle, confusion, or penalties.

Value Added Tax (VAT) is one of the most complex areas of UK tax law. Unlike annual accounts, VAT requires frequent attention. Most businesses must submit returns every three months. Furthermore, the rules regarding what you can and cannot reclaim are strict. Therefore, mistakes are common and often costly. At Tax-Pert, we manage your VAT obligations from start to finish. Because we comprehend the shades of the system, we guarantee you stay obedient while optimizing your cash flow.

Understanding VAT Registration

You must register for VAT if your taxable turnover exceeds £90,000. However, you can also register voluntarily before hitting this threshold. Deciding whether to register early is a strategic choice.

If you sell to other businesses, registering allows you to reclaim VAT on costs. This can save you significant money on equipment and stock. However, if you sell to the public, adding 20% to your prices might hurt sales. Therefore, we analyse your business model carefully. We advise you on the exact right moment to register.

The Registration Process

Registering with HMRC can be tedious. You must select the correct business code and effective date. If you get the date wrong, you might owe back-dated tax. Consequently, we handle the application for you.

We ensure your business activity is described correctly. We also set up your online VAT account. Once you are registered, you receive a VAT certificate. We then guide you on how to issue compliant VAT invoices. Thus, you look professional to your clients immediately.

Choosing the Right Scheme

Many businesses assume there is only one way to pay VAT. However, HMRC offers numerous structures. Selecting the correct one can save you time and money. For example, the Flat Rate Scheme simplifies calculations for small businesses. You pay a fixed percentage of turnover and keep the difference.

Alternatively, the Cash Accounting Scheme is excellent for cash flow. You only pay VAT to HMRC when your customer pays you. This prevents you from paying tax on unpaid invoices. We review your figures to see which scheme benefits you most. Consequently, your VAT strategy aligns with your business needs.

Making Tax Digital (MTD)

“Making Tax Digital” has transformed how VAT is reported. You can no longer type figures into the HMRC website manually. Instead, you must use compatible software to submit returns. This requirement is now mandatory for all VAT-registered businesses.

Therefore, digital record-keeping is essential. We help you set up MTD-compliant software like Xero or QuickBooks. We link this software directly to your bank feed. Thus, your transactions flow into your return automatically. This reduces data entry errors significantly.

Preparing Accurate Returns

Every quarter, we prepare your VAT return with precision. We do not just click “submit.” First, we review your transactions line by line. We check that you have valid VAT receipts for every claim. HMRC is strict about evidence; a credit card slip is often not enough.

Furthermore, we ensure you are not claiming on exempt items. For instance, you cannot reclaim VAT on client entertainment. We filter out these non-allowable costs. Consequently, your return is “clean” and less likely to trigger an inquiry. We then send the figures to you for approval before filing.

Dealing with International VAT

If you trade outside the UK, VAT becomes even more complicated. The rules for services and goods differ. Post-Brexit regulations have added new layers of paperwork for importers.

We guide you through “Reverse Charge” rules for buying services from abroad. We also assist with “Postponed VAT Accounting” for imports. This allows you to declare import VAT on your return rather than paying at the border. Therefore, your cash flow is not tied up at customs.

Handling VAT Inspections

VAT inspections can be stressful. HMRC officers have the power to examine your records going back years. If they find errors, they can issue penalties and charge interest.

However, if we manage your VAT, you are prepared. We keep your digital records organised and accessible. If an inspection occurs, we act as the point of contact. We provide the inspector with the data they need. Because our work is thorough, inspections usually proceed smoothly.

Partial Exemption Challenges

Some businesses have a mix of taxable and exempt income. For example, property developers or financial advisors. This leads to “Partial Exemption” calculations. You cannot reclaim all your input VAT.

These calculations are notoriously difficult. However, our team has the technical expertise to handle them. We perform the standard method calculation to determine your recoverable percentage. Thus, you claim exactly what you are entitled to, remaining fully compliant.

Final Thoughts

VAT should not be a barrier to your business growth. It is simply a mechanism for collecting tax. However, it requires professional management to avoid pitfalls. Therefore, let Tax-Pert be your VAT department.

Ready to simplify your VAT? Contact Tax-Pert today. We ensure your returns are on time, every time.