Once your turnover exceeds £85,000 in a rolling twelve month period, you must register your business for VAT if you provide taxable supplies. Depending on your circumstances it can also be advantageous to register voluntarily earlier.
We deal with VAT registrations, submissions and online filing. We also advise clients as to which schemes are best for them, which can help reduce the VAT liability and also assist with cash flow.
We have clients which sell both within the EU and globally. If you have income from other countries and are VAT registered, this may mean you need to complete an EC Sales List. This is something we deal with on a regular basis for our clients.
What’s out there?
Standard – Invoice Basis
This is the standard basis of preparing a VAT return. It depends on your business as to whether or not this is the best scheme for you.
Many small businesses (turnover under £1.35 million) choose to use cash accounting for the VAT return preparation, as this assists with cash flow. This scheme accounts for VAT on the basis of cash paid and received, rather than time of supply.
Annual accounting allows the business to complete one return once a year, however payment is not made once a year this is spread throughout the year. This scheme is beneficial as there are less reporting requirements.
The Flat Rate Scheme (FRS) is a simplified way of preparing your VAT returns, and is ideal for businesses which have few purchases. Turnover must be below £150,000 (excluding VAT) to join the scheme and a business must come off the scheme when turnover reaches £230,000 (including VAT).
A business which makes both taxable and exempt supplies is classed as partly exempt, and can recover the input VAT directly attributable to the taxable supplies and may also be able to recover input VAT directly attributable to the exempt supplies subject to a de minimis limit. To prepare a partial exemption VAT return a business needs to know what costs directly relate to making the taxable supply and what does not.
The treatment of VAT with overseas suppliers and customers depends on whether the transaction takes place within the European Union. A business needs to determine where supply takes place and there is criteria to help establish this. As well as completing a VAT return an EC Sales List may need to be completed. With effect from 1 January 2015 if you supply digital products within the EU you now have to have charge VAT on those sales, regardless of the level of your UK sales. We can assist you with this.