Are you running a small business? Are you worried that your VAT responsibilities might overwhelm you? Well, here are a few tips to help you stay afloat when it comes to VAT, especially with choosing a good VAT scheme and being on the right side of HMRC. You should consider visiting HMRC site to calculate your VAT liabilities and read an overview of everything you need to know.
- Getting In Touch
Contact the HMRC for VAT assistance through 0845 010 9000 between 8am and 6pm. You can also visit the microsite for more information on the matter.
- Registering For VAT
You need to know the right time to register for VAT. When your business has a turnover of £ 77, 000 within 12 months, you need to register. You can also choose to register regardless of whether or not you’ve reached this threshold.
- Choose The Right VAT Scheme
Besides the standard scheme, you can also enjoy some benefits from using the flat rate scheme. It was designed to simplify the whole VAT process for SMEs. There’s also the cash accounting scheme where you pay back your VAT earnings to HMRC once your customers have paid you. Additionally, there’s the annual accounting scheme.
- The Impact On Customers
After VAT registration, you need to include the VAT costs on what services or products you offer. It will affect the pricing and also some of your customers who are not registered for VAT since they can’t reclaim the cost on their own.
- Bookkeeping
Make sure your VAT records are regularly updated and accurate, allowing you to complete your returns effortlessly. Keep all the invoices, receipts and any other relevant documents in a central place to make them accessible whenever you need them.
- Keep The VAT Safe
Make sure that all the VAT liabilities collected for HMRC is kept in a safe place. If possible, keep everything in a separate bank account alongside other taxes you might have to pay in the future like corporation tax.
- VAT Online
Since 2012 April, all businesses are required to submit their VAT quarterly returns online.
- Direct Debit
All VAT liabilities payments should be done electronically as of 2012 April. You can create a direct debit with HMRC who can deduct automatically everything you need to pay from your business account.
- VAT Penalties
Don’t pay your VAT returns or payments late. You will not get a surcharge for an initial late submission. However, you will be charged a percentage of VAT liabilities owed that will increase depending on the number of times you will be late.
- Whenever in doubt regarding everything about VAT, you should contact HMRC or hire a professional advisor such an accountant to help get your things in order. There are many accountants and financial advisor who can help you get on your feet with regards to VAT. Just find the right one for the job.
If you need more help with VAT then try VATGlobal – they should be able to set you right.