VAT (Value Added Tax)
What is VAT?
VAT is an indirect tax which is applied on some goods and services by VAT registered businesses in the UK.
When do I need to charge VAT?
If at the end of any month, your business’s income in the last 12 months is more than £85,000 in 2020/2021, it becomes compulsory to register your business for VAT. Delaying the registration once the income is above this threshold, results in penalties from HMRC.
However, if needed, a company can register voluntarily even if the income is below the threshold of £85,000. This is needed in cases where the suppliers only agree to collaborate with VAT registered businesses.
Rate of VAT
The current standard rate of VAT in the UK in 2020/2021 is 20%. Depending on the goods or services you provide, you might have to charge a reduced rate of 5%, or zero rate of 0%.
Ensure you are charging the correct rate of VAT for your product or service, by contacting one member of Priority Point to obtain qualified advice.
What are my company’s responsibilities once VAT registered?
All of your sales invoices will have to display the rate and amount of VAT, unless the total value of the invoice is less than £250.
Every three months, your company will have to prepare and submit a VAT return, which means you have to record all income and expenditure with VAT and report it to HMRC.
HMRC implemented earlier this year VAT MTD which means you are no longer able to submit a VAT report without an accounting software.
What can Priority Point do for you?
We can apply for VAT registration on your behalf
We educate you on steps to take, to ensure your business is fully compliant with HMRC for VAT purposes
We process all expenses with VAT charged and VAT paid to produce the quarterly VAT report. All you have to do is provide us access to your physical or electronic documents.
We submit the VAT report to HMRC via our software
We notify you of the amount due to HMRC of refund due to you
We keep you up to date with all deadlines for submissions and deadlines for payments
We contact HMRC on your behalf for VAT purposes, via phone or post
Talk to us about your business's needs.