by Nick Robinson | Nov 30, 2014 | VAT
If you run a business that needs to be VAT-registered, or you would like it to be for various reasons, then this article is for you.
This is a brief rundown on what is VAT and whether you need to register for VAT.
A business will add VAT onto their bill, collect the money and send it on to HM Revenue and Customs.
However, there are some goods and services which are exempt from VAT.
One of the perks of becoming a tax collector for the government is that you get to claim VAT back on the goods and services you purchase.
It follows that if you are not VAT registered then you cannot charge VAT or claim it back.
VAT is currently charged at three levels – the standard rate of 20%; a reduced rate of 5% and a zero per cent rate.
To be able to charge VAT, your turnover must be more than £79,000 – or if you think it will go over this amount you must register.
ALL businesses who have a turnover greater than the threshold MUST be registered.
This means that you will have to submit VAT returns on a regular basis, usually quarterly, which will show the VAT charged to customers and the VAT you have paid on goods and services.
The difference between these two figures is the amount you must send to HM Revenue and Customs.
Most businesses and some other categories can register for VAT, including charities and organisations.
Your accountant should be able to help you (try Yorkshireaccountancy.co.uk for cheap VAT returns) or you could enlist the help of a payroll company to do this for you. A good firm to try would be one like rapidpayroll.co.uk.
They will be able to help with the reduced rate items, such as energy bills, and the zero VAT items such as books and newspapers.
Obviously there are many more categories which are zero or lower VAT rated and your accountant will be able to help.
You can find out more about VAT at http://www.hmrc.gov.uk/vat/start/introduction.htm which also details a very good VAT helpline or you could visit cheapaccountants.co.uk to see what a firm of accountants who understand VAT and VAT issues can do for you and your business and potentially provide cheap VAT returns.