News

VAT News

VAT Rate Change

From the 1st January 2010 the standard rate of VAT % reverts back to 17.5%.

If you have any questions or would like to discuss this topic do not hesitate to contact us.

November 2009

VAT Returns - Filing Changes 1 April 2010

Under new government proposals, from 1 April 2010 the way some businesses file their VAT return and pay any VAT due will also change for:

1. all VAT registered business with a turnover of £100,000 or more (excluding VAT); and
2. all businesses newly registering for VAT, whatever their turnover

If your business falls into either of these two categorise then you must file your VAT returns online and pay any VAT electronically.

However if you do not fall into either of these two categories then you will still be able to file paper returns.

If you need any help or assistance with setting this up online please feel free to contact us.

Correcting entries on VAT returns does not need to be notified to HMRC in writing and may be adjusted through a VAT return, if they are under the de minimis limit, which is the greater of:

1. £10,000;
2. one percent of the net VAT turnover (as per Box 6) on the VAT return for the period.

However, this is subject to an upper limit of £50,000.

If you have any questions or would like to discuss any of the details above please do not hesitate to contact us.

November 2009

VAT Schemes for Small Businesses

A reminder of the VAT schemes available to small businesses, of special note is the recent increase in turnover threshold for the Cash Accounting scheme which is very useful in controlling cash flow. You can also start to use this scheme at the start of your next VAT quarter with no need to apply or advise H M Revenue & Customs.

Annual accounting

Monthly/Quarterly instalments - one return at year end when balance is paid. This scheme can be used by any business with turnover (excluding VAT) not expected to exceed £1.35mill.

Cash accounting

Pay and reclaim VAT on receipt/payment of invoices. This scheme can be used by any business with turnover (excluding VAT) is not expected to exceed £1.35mill (from 1 April 2007) prior to this the threshold was £660,000. Must revert to invoice accounting when turnover exceeds £1.6mill.

Flat rate scheme

Pay VAT on a fixed percentage of gross turnover dependant on type of business. No reclaim of input VAT unless one-off purchase is £2,000 or more. Can also use cash-accounting method. In the first year of trading 1% discount on usual rate. Care - it may not always be beneficial, comparative checks should be made periodically. This scheme can be used by any business with annual turnover of £150,000 or less.

30/5/07

Staff mileage claims

From 1 January 2006 (and only due to EU legislation) staff making mileage claims based upon either the tax free mileage rates OR the fuel mileage rates, they MUST have VAT receipts attached to the claim if YOU wish to reclaim the VAT. It does not matter if more supporting claims are attached to the previous or subsequent claim but as an employer you must ensure this is complied with. We suggest you ask staff to obtain a VAT receipt every time they get fuel and attach every one to their next mileage claim.

06/01/06

Bad debts

Many clients are aware that VAT on sales invoices can be recovered if the invoice is not paid within 6 months. But did you know that you have to REPAY VAT on supplier’s invoices if they are not paid within 6 months! This is now a staple test for VAT inspections.

21/07/05

VAT and Corporation Tax Inspections

Again these are on the increase too. The same comments apply per the above but as we look after fewer clients through our outsourcing service than we do for payrolls you may have more of a problem. Please call us for help if you receive notice of any form of tax inspection, but a pre-emptive review of your systems and controls may be very worthwhile.