VAT Returns for small Limited company businesses.

VAT Returns Services for small Limited company businesses.

Our vision and our achievements:

  • Over one hundred ‘5 star’ “client satisfaction reviews” Save time, stay organised and Transform into a profitable business
  • Business excellence award winners for 2023 for “Most Client-Focused Business Tax & Accounting firm” knowing you’re in safe hands
  • 10 years of experience with HMRC and our client service guarantee, maximising your tax allowances

We go one step further for our clients.

HMRC is the UK government body in charge of taxation, that has the power and mandate to enforce taxes and as a result sets out rigorous due dates for filing the returns.

Why does a business need VAT Returns?

The filing of VAT returns in the UK is mandatory and voluntary for all businesses in the UK that reach £85,000 in an cumulative rolling 12 month period and must register for VAT. This is worked out of from the anniversary of the business. You must also register if in the next 30 days you will go over the threshold.

Find out more

This is one thing every business accountant, worth his title, must be aware of. Undoubtedly, it is very crucial for every business to abide by the VAT return days set by the HMRC. The late submission of one’s VAT returns the late payments of pending VAT as well is most likely to lead to fines.  A business can voluntary register if they are below the threshold and can also de register if they remain below the de registration limit.

What is the process?

The filing of VAT returns needs to be done digitally these days. The respective due dates and amounts will be shown on the returns. In addition, the remittance of the due amounts can be done through many methods like the use of debit or credit cards or even making direct debits. However, it is extremely crucial to take special note of one’s due date for VAT settlement and understand that this describes the day on which all settlement needs to have been cleared.

So, think about it and organize your approach to VAT settlement beforehand to guarantee the due date is adhered to. The very first thing you need to do to start the procedure is consult the HMRC online solutions and enlist straight away if you haven’t yet. To achieve this, you merely head to their online portal and key in some fundamental information, like your respective VAT number, business address, and so on.

Thereafter you will be provided with an activation code that must be used in not more than 30 days. If you are in a rush to send your returns, the HMRC will allow you to go on without triggering the code. However, it is a great idea to take the activation approach. This is allowing you the ability to use the HMRC’s other services.

What is the difference between the Vat Schemes

Why the standard VAT scheme?

With the Standard rate scheme, you would normally do quarterly vat returns. On this return, you would report the sales vat and purchases vat. You would then pay the difference between these two.

As an Example, if you had £10,000 sales plus vat and you had purchases of £2000 plus vat, (we are using the rate of 20% in this example) you would have the following:

Sales vat                                            £2000          (£10,000 * 20%)

Less Purchases Vat                         £400             (2000 * 20%)

Vat due                                              £1600

Why the flat rate scheme?

The scheme was introduced by HMRC to simplify vat returns. This would also give an incentive to earn additional income.

The procedure of the sales is like the standard scheme for the customer as they still get charged vat.

The difference occurs when you calculate the vat return for your limited company or sole trader.

The Total gross sales are taken including vat. This is then multiplied by a percent depending on your sector. As an example, we will take 13%

Sales £10,000 plus vat 2000 * 13% = £1440

The amount you have charged the customer is £2000 and the amount payable to HMRC is £1440. This gives you an additional income of £560 for this quarter.

Also, please note the new rule of cost of trader to the flat rate scheme is now in place.

You are classified as a limited cost business if your goods cost less than 2% of your turnover or £1000 per year.

If you fall within this category then will need to use the rate of £16.5%

Completing Your VAT Returns?

This modern online way of filing VAT returns was embraced partially because it has many benefits over the outdated, paper based methods. The primary benefit is that it is very simple and fast. You can submit your returns instantly when ready. It can be anytime; even at night. Additionally, these new system saves your VAT returns for the last 15 months. Moreover, if you forget, this new system brings is that you can receive timely email tips from the HMRC to alert you when your returns are due.

What if I get a VAT inspection?

If HMRC feels that the information you have filed is not precise, they might order a VAT inspection of your facilities. A VAT inspection examination is an in-depth investigation into your book of accounts and business operations and is carried out if you are suspected of intentionally averting VAT payments.

It is performed by professional VAT officers under the HMRC office. If this investigation is initiated, you are most likely to be alerted at some point in time through a letter written by a VAT officer, detailing that a query has been opened to investigate you. In combination with a written notice of inspection, you might also get a special notice to produce, which suggests that you need to produce files and reports in accordance with the VAT officer’s demands.

Going through a VAT inspection can be one of the most unpleasant times for most of Limited companies, Sole trader or Partnerships. It is for this reason that one must look for a taxation expert immediately. This is to ensure that one is totally notified about the procedure and helped to reduce the VAT fines and charges that one might deal with as an outcome of the examination.

How much does all this cost?

Vat services start from £140 plus vat per month, the prices are dependent on the type of the business and the time required to complete the vat return. As mentioned earlier you can trade as a sole trader or a limited company and be registered for vat. We offer packages that coincide with your limited company accounts or your self-assessment tax return.

Call us for a free consultation on 0208 396 6128

Our current service areas:

London and Essex