VAT

Accounting Schemes:

There are three optional schemes available to small businesses:

Annual Accounting

This entails nine equal payments of VAT on account, with a tenth to settle the final liability. Eligible businesses must expect their annual turnover not to exceed £1,350,000 excluding VAT.

Cash Accounting

Here a trader accounts for VAT on the basis of actual cash paid and received. Expected annual turnover must be less than £1,350,000 excluding VAT to join the scheme.

FlatRate

Small businesses with an annual taxable turnover of under £150,000 (net of VAT), or total net turnover including exempt sales of under £187,500 can apply to use a flat rate scheme. A business can stay within the scheme until its VAT inclusive turnover exceeds £230,000 per year. The business calculates its VAT liability as a flat percentage of gross turnover including VAT, rather than calculating output tax and deducting input tax. The flat rate percentage depends on the sector the business operates in.

Exports and the supply of services abroad

Exports of goods to persons outside the EU are usually zero-rated. Where goods are exported to the EU, the supply is zero rated only of the goods are supplied to a person registered for VAT in the state to which the goods are exported. The supplier must have the customers foreign VAT registration number.

Import of goods into the UK

A person who imports goods, other than most types of zero rated goods, into the UK from outside the EU may be liable to pay VAT on the value of the goods as if it were customs duty. Should you require any advice regarding VAT registration, liability to VAT or further information and explanations regarding the various VAT schemes then please do not hesitate to contact us

UK VAT is chargeable on:

Rates:

Some supplies may be exempt from VAT or outside the scope of VAT, please contact us if you require advice regarding the rate of VAT for the services or supplies you make or receive.

We can also provide you with assistance in deciding what input VAT you claim and help you calculate your liability when your business supplies are partially exempt.

Registration:

Below are the Registration and Deregistration thresholds

From Registration Threshold Deregistration Threshold
01-April 2013 £79,000 £77,000

 

Returns:

A VAT registered business must make VAT returns every quarter, which must normally be submitted to HMRC within one month and seven days of the end of the period.

Large businesses

UK Businesses with an annual VAT liability in excess of £2.3 Million are required to make monthly payments on account of their VAT.