We are the providers of the VAT services Peterborough businesses recommend, and we’re here to tell you how to best prepare for your VAT return.
What is a VAT Return?
First things first – what is a VAT return? Well, it is a record of your total sales and purchases, the amount of VAT you owe, the amount of VAT you can reclaim, and what your VAT refund from HMRC is. Even if you have no VAT to pay or reclaim, you must still fill out a return by the appointed date. If you have a 12-month turnover of £85,000 and over, you are required by UK law to complete a VAT return. We work with businesses of all sizes in Peterborough, and we have helped many to successfully complete their VAT returns.
When to File Your Return
One thing that you will hear a lot about are the filing dates for your VAT returns. These are at the end of each accounting period, which is every three months. So you will file a VAT return four times a year, unlike your tax return. You will need to include the relevant start and end dates on your VAT return when you submit it to HMRC. Do not worry – we’ll make sure that all the necessary information is there before it’s sent off.
Familiarising Yourself With VAT
As you would expect, there are a lot of rules and regulations surrounding VAT in the UK. As a result, it is very easy to get confused. The Government does have a VAT Guide that business owners can take a look at. We do recommend that you do this, as it is a good idea to be as familiar as you can with the current regulations.
However, for the sake of keeping things simple here, the essential information that you need to be aware of is as follows:
- There isn’t just one rate of VAT, and the current rates include standard (20%), reduced (5%) and zero rate (0%).
- You can’t reclaim VAT on everything, so be careful what you include. You can’t reclaim VAT back on purchases made for non-business use. If you aren’t sure if something fits the criteria at any point, we will be able to let you know.
- There are penalties of 15% for undeclared errors, so the repercussions for not filing your return properly can be very costly. We’re here to help you avoid making those mistakes.
UK Government Schemes
The UK Government does offer a Flat Rate Scheme. This will see you pay a fixed rate of VAT. You will then keep the difference between what you charge your customers and pay to HMRC. You’ll be eligible for this scheme if your turnover is £150,000 or less, excluding VAT. Obviously, this scheme can be very beneficial for small businesses – and we work with plenty of those in and around Peterborough. The one downside is that you cannot reclaim VAT on purchases, unless they are capital assets of over £2,000.
Another scheme is the Cash Accounting scheme. With this, you will pay the VAT collected on payments received from your customers instead of the amount of VAT you’ve been invoiced for. You’ll be eligible for this scheme if your VAT turnover is less than £1.35 million per year.
Contact The Providers of VAT Services Peterborough Businesses Trust
One of the most important things you can do is to be prepared for your VAT return. Keep a record of all the payments made to your company, and all your expenditures. We’re here to help you keep on top of this, and make sure that everything is in order when the time to file your return rolls around again.
If you would like to find out more about the VAT services Peterborough clients love, then get in touch today.