VAT (Value Added Tax) is one of the most common taxes UK businesses deal with. But for newcomers, it can seem complicated.
Here’s what you need to know:
- What is VAT?
VAT is a consumption tax added to goods and services. Businesses collect it on behalf of HMRC. - When to Register?
If your taxable turnover exceeds £90,000 in a 12-month period, you must register for VAT. - VAT Schemes:
- Standard Scheme: Submit quarterly returns and reclaim VAT on purchases.
- Flat Rate Scheme: Ideal for small businesses with minimal expenses.
- Annual Accounting Scheme: Fewer returns, one annual VAT payment.
- VAT Returns: You must file VAT returns (usually quarterly) and pay any owed VAT to HMRC on time.
- MTD (Making Tax Digital): VAT-registered businesses must keep digital records and submit VAT returns using compatible software.
Managing VAT doesn’t need to be stressful—partnering with an accountant ensures you’re charging and reclaiming VAT correctly and filing on time.
