Value Added Tax (VAT)

Businesses should register for VAT if the value of their taxable supplies in the past 12 months, or in the next 30 days alone, is going to exceed the registration limit (currently £68,000). Taxable supplies relates to the turnover of the business and not the profits. If the turnover of the business is less than the registration limit, in certain circumstances you may still want to register for VAT as it may mean you could be entitled to VAT refunds.

You can register for VAT online at the HM Revenue & Customs website or we can do it for you. Once you have registered you will need to complete VAT returns, most commonly on a quarterly basis, and submit them to HM Revenue & Customs one month after the quarter end together with a payment. There are strict penalties for not complying with the filing deadlines. If you are struggling with time, do not allow yourself to get penalised – let us complete the quarterly VAT returns for you.

Flat Rate Scheme

This scheme is designed to reduce the cost of complying with VAT obligations by simplifying the way small businesses calculate their VAT. It is available to businesses who expect their VAT exclusive turnover in the next 12 months to be:

  • No more than £150,000 (£225,000 after 1 April 2009) taxable supplies, and
  • No more than £187,500 total business income (note that this test is not required after 1 April 2009).

Taxable supplies are calculated by looking at the total of supplies at the positive and zero rates, excluding VAT and the value of any capital assets expected to be sold. Total business income includes taxable supplies and the value of exempt and other non-taxable income.

The flat rate scheme saves time by removing the need to calculate and record output tax and input tax in calculating the net VAT due to HM Revenue & Customs. The VAT in a period is calculated by applying the flat rate percentage to the tax inclusive turnover for the period. However, the flat rate scheme can cost extra VAT if you make supplies which are exempt from VAT as flat rate VAT will be payable on the value of all supplies made, including exempt supplies.

At Turnbull Associates* we can:

  • Advise you whether or not you need to register for VAT or if it is beneficial for you to register on a voluntary basis
  • Establish with you whether using a flat rate scheme is more advantageous for your business
  • Complete your VAT returns for you in good time and submit them to HM Revenue & Customs on your behalf
  • Assist you with, and/or attend meetings with, the VAT inspector
  • Advise on de-registration of the scheme if it is no longer appropriate.

For information and assistance on our services please call 01923 224411 or email Hazel O'Hara or Priya Raja-Motala.

* Turnbull Associates is the trading name of Turnbull Associates Limited.