THINGS TO KNOW ABOUT VAT
If the taxable turnover is more than £85,000 for the last 12 months or it’s expected to exceed £85,000 on the next 30 days, a business must register for VAT. VAT Taxable turnover refers to the total value of sales a business makes that is subject to tax after any VAT-exempt amounts are removed. A business can also voluntarily register if its taxable turnover does not exceed £85,000. Upon registration to HMRC, the business receives the VAT Certificate, which contains details such as Registration Date, Certificate Date and VAT Return Dates. Once registered, the business has an obligation to submit VAT Returns to HMRC and charge VAT on their sales.
A VAT Return is a form to fill out indicating how much VAT amount the business has charged for and deducting the VAT amount paid to other businesses. It contains information such as total sales, purchases, the amount of VAT owed or the amount of VAT for reclaim. This is usually done every three (3) months and must be done even if there’s no amount to be paid or reclaimed. The deadline for submission is a month and 7 days after the Return Dates mentioned on the VAT Certificate. VAT Return is to be submitted either of these three (3) ways (a) through Accounting Software that’s compatible with MTD (b) appointing an agent or accountant (c) VAT Online Account – only if the business uses the VAT Annual Accounting Scheme. If there is an amount payable, this must be paid electronically, either through Direct Debit or Internet Banking.
If a business fails to submit a VAT Return on the prescribed deadline, HMRC will record a default on the account. If the default happens again within twelve (12) months, a surcharge might need to be paid. A surcharge is an extra amount to be paid in addition to the VAT Amount owed. HMRC can also charge penalties if there has been an understatement or overclaimed of a return due to an inaccurate form submitted or if the business has submitted a paper VAT Return. So instead of worrying if your business has complied correctly or has not missed any deadlines, Cheylesmore Accountants is here to help and will make filing VAT Return easy for you! Cheylesmore Accountants offers a variation of services such as Bookkeeping, Account preparation and submission, Tax Planning, Cashflow Planning, VAT Returns and so many more. You may visit https://www.cheylesmore.com or send an email to info@cheylesmore.com.