Vat Returns
Broadly
speaking, if your turnover for the previous 12 months exceeded £68,000,
or looks like it may do so, then you may need to become VAT registered.
After the registration process, you will need to submit a quarterly VAT
return to HM Revenue and Customs (HMRC).
You pay VAT on goods and services that you buy into your business i.e.
an input tax. When VAT registered, you can charge VAT on the goods and
services you sell i.e. an output tax. The standard VAT rate is currently
15%. Other rates depending on the goods and services provided are reduced
(5%), and zero (0%).
When you submit a VAT return, you are basically telling the HMRC what
the difference is between your input tax (how much VAT you paid), and
your out tax (how much VAT you charged). In simple terms, if you paid
more VAT than you charged, you are due a refund. If you charged more VAT
than you paid, then you should submit payment to the HMRC for the difference
with your VAT return.
As
with many areas of life and business, things can sound a lot easier than
they actually are. Completing and submitting VAT returns is not an easy
process, particularly if you or your business is seeking VAT refund. A
good knowledge of the laws, administrative procedures and processes, and
the finer points of VAT is so important.
For these and many other reasons it always pays to have an expert on hand
to take the potential pain and complexity out of the process, and to save
you valuable time and effort that you you could be putting into the growth
of your business.
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