VAT is an incredibly complex tax, even for the experts. Different transactions incur different rates, standard rated, zero rated, special rates or even no VAT at all!
Add in different schemes for low turnover, construction, car dealers etc and you have a maze to navigate. If you get it wrong you may be paying too much VAT or end up with a costly VAT inspection and penalties.
Sutherland Black offer a great VAT accountant service in Scotland to make sure your VAT returns are submitted correctly every time, you do not overpay VAT and that you get the VAT advice that you need.
What VAT Services Does Sutherland Black Offer?
If you use us as your VAT accountants we can offer you various different levels of support. We can offer a full bookkeeping service which means we will account for the correct level on VAT for all your sales and purchases. We will then compile and submit your vat return making sure that we have claimed all the VAT on any goods and services that you have paid VAT on. We can give you great VAT reporting so you always know what your next liability is likely to be.
Alternatively if you do your own bookkeeping we can review your VAT return before you submit it to HMRC to ensure that it is accurate and that you are not overpaying.
We offer VAT advice to all of our VAT registered clients. Our accountants are VAT experts, and we have access to VAT specialists for complex transactions.
Who Needs To Register For VAT?
Businesses must register for VAT if their turnover goes over £85,000 in the previous 12 months, or you know that the turnover of your business will be over £85,000 in the next month. If you are starting a new business or your turnover is growing we can do your VAT registration for you and register as your Agents for VAT with HMRC.
What Different VAT Schemes Are There?
There are many different VAT schemes that are different to the standard VAT regime. The most commonly used VAT schemes are noted below. We can give you advice if it would be preferable for you to use one of the alternatives.
VAT Cash Accounting Scheme
Usually the VAT payment to HMRC is based on the sales and purchase invoices that you have issued or received. In the cash scheme you will only pay VAT on the money that you have paid or received. This can be beneficial if you have slow payers as you will not have to pass the VAT on to HMRC until you have received payment.
VAT Margin Scheme
VAT margin schemes are available for businesses such as motor traders who buy and sell second hand items. In this scheme you pay VAT on the difference between the buying and selling price rather than the whole amount. This makes the VAT returns is slightly more complicated so it is well worth getting advice before you start on record keeping and calculation of your VAT payments.
Flat Rate VAT Scheme
The Flat Rate VAT scheme was designed to make submitting VAT returns easier for small traders by charging a fixed rate on turnover instead of accounting for every transaction. It also can have beneficial financial results however the limited cost trader rules that HMRC brought in in 2017 made it a loss less lucrative for contractor style businesses than it was before.
Why Use Sutherland Black As Your VAT Accountants?
We have years of experience of completing VAT returns for our clients and have experience of the many schemes that small business clients can use. Cloud accounting software can make preparing VAT returns much simpler and can assist in checking that there are no errors on your VAT return. Sutherland Black are Cloud Accounting experts and can advice is setting up your cloud accounting software for your particular VAT circumstances.
We are a member of the Chartered Institute of Taxation which means we have the highest level of tax knowledge. Your dedicated VAT accountant will advise you and ensure that you are not overpaying VAT.
Who Actually Pays VAT?
VAT or Value Added Tax is actually a tax on consumers. Businesses are really a tax collector for the government on goods and services that they sell or purchase in their business. One issue for businesses is that the VAT they receive is not really theirs so making sure the cash is still available by the time the tax is due is an important accounting task.
If a business has consumer end users like a hairdresser then the decision of whether to register for VAT is a tricky one as their services will become more expensive. If the business sells primarily to VAT registered businesses the VAT status will not make any difference as the purchase will be able to reclaim the VAT that has been charged.
Is A Jaffa Cake A Biscuit Or A Cake?
This seemingly trivial question is the sort of question that causes pain in the VAT world. The UK VAT rules state that the VAT on cakes and biscuits is Zero Rated, ie 0%. However, in a typical VAT exception if a biscuit is partly or wholly covered in chocolate then the VAT rate is the standard rate, 20%. A famous VAT tribunal ruled that the Jaffa Cake was indeed a cake and the nation rejoiced as there was no VAT to pay.
Can I Register For VAT If My Turnover Is Under the VAT Threshold?
The short answer is yes. You can do a voluntary VAT registration even if you business has a turnover that is under the VAT registration threshold. We will quite often advise businesses that are starting up to do a voluntary VAT registration if they are selling to VAT registered businesses where the customer will be able to reclaim the VAT anyway. The inconvenience of having to do a VAT may be offset by appearing to be a larger VAT registered business.
How Often Will I Get An HMRC VAT Inspection
In the “good old days” HMRC used to visit every business that registered for VAT to make sure they were following the proper procedures and that their VAT payments were accurate. However in the 21st Century this is no longer the case and HMRC will do compliance visits on a risk basis. If you do receive notice of a compliance visit we can handle the whole thing for you taking away the stress of dealing with HMRC yourself.