VAT Return Services

Introduced in 1973 Value added tax or “VAT”, is a tax added to the sale of goods to consumers. It brings in around 18% of tax receipts in the UK so ‘paying the VAT man’, or ‘adding the Vodka and Tonic’ is something many businesses are going to have to deal with for many years to come…

For business owners, VAT is annoying, confusing, time-consuming and just one less thing they’d like to worry about.

Fortunately, at RJF we love VAT (ok no we don’t love it but we are accountants, we like numbers and we like saving you time…) we can do your VAT return for you, on time, error-free, making sure you’re paying exactly the right amount when you should.

Who needs to pay VAT?

The boring bit… you need to register for VAT if your VAT taxable turnover goes over £85,000 in a 12 month period:

From HMRC themselves:

“You must register for VAT if:

you expect your VAT taxable turnover to be more than £85,000 in the next 30-day period
your business had a VAT taxable turnover of more than £85,000 over the last 12 months”

Source: https://www.gov.uk/vat-registration/when-to-register

You can also choose to optionally register for VAT.

Why would you choose to do that?

  • You can reclaim VAT on any item you buy for business use.
  • You might know you are going to go over the threshold soon
  • You might not want to adjust pricing to include VAT at a later date
  • Your business can appear more established
  • Some companies will only deal with VAT registered businesses

What do I need to do if I register for VAT?

The main and obvious one is to charge VAT on the right products at the correct rate. So you’ll need to know what rate of VAT applies to your product or service and if you are trading internationally how to account for cross border transactions.

You also need to clearly display VAT on your invoices, and keep excellent records.

Then you will need to submit a VAT return to HMRC every 3 months.

What is a VAT return?

A VAT return is a submission to HMRC that calculates the amount of VAT due on your sales minus the VAT you could reclaim on any purchases made.

Eg:

In the 3 month period, your business sold £10,000 worth of goods and you added 20% VAT to these goods. Total £12,000

VAT received = £2,000

You also purchased multiple items needed to run your business and were charged VAT on your office rent.

You made £4,000 worth of purchases and you paid a total of £500 VAT (found on your invoices)

Therefore you owe HMRC £1,500 in VAT (VAT received – VAT paid)

If you had paid more that you received you would receive a VAT refund.

How often does a VAT return need to be done?

You must submit your VAT return at the end of each VAT ‘period’. Most businesses choose to do a quarterly return to match their financial year. Although you can opt to do a monthly return with the benefit of being able to reclaim VAT quicker for cashflow purposes.

Returns can now only be submitted online, so you’ll need compatible software if you choose to do it yourself or of course, as a client we can do it for you.

It’s also important to remember that you’ll need to keep very good records relating to your VAT for both purchases and sales, as this information is used to calculate your VAT return.

We use a very convenient app with our clients that allow them to upload receipts for purchases quickly and seamlessly through their phone or via email ensuring they never miss out on any VAT reclaim they might be due.

What happens if you get it wrong?

There are penalties for not registering when you are required to. But most businesses can fall foul of the late filing penalties if they opt to DIY and are not organised

Surcharge Liability Notices are a penalty for late filing depending on the severity and delay, ranging from 2% of the VAT due to 15%.

This is not meant to scare you and contrary to popular belief, “innocent” or genuine mistakes may pass with a warning rather than a penalty. However serious or deliberate mistakes can result in a 100% penalty.

This is rare, but nevertheless almost always avoidable! Keep good records, do the right calculations and file on time… or send everything to us and forget about it.

What can we do?

At RJF as part of our VAT return services we will:

  • Advise and guide you on any VAT matters, from flat rate to oversees to everyday queries about invoice standards.
  • Register you for VAT.
  • Submit your VAT returns for you.
  • Reclaim any VAT rebate that you are owed and ensure it’s paid into your bank asap.

We’re here to help you in a simple, friendly no jargon manner.
We work with all kinds of businesses from start-up to decades-old family businesses. From tech to agency, contractor to creative.

We talk your language and understand what it’s like to be an entrepreneur.

Make VAT one less thing to worry about today!