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VAT Accounting

You must register for VAT if your VAT taxable turnover goes above £85,000 in a 12 month consecutive period. At Moss Accounting, our in-house Bookkeeper and Accountant can deal with your VAT registration and ongoing compliment including quarterly VAT returns and registration for any relevant VAT schemes that may benefit your business. 

Compulsory Registration

You must register for VAT if:

  • You expect your VAT taxable turnover to be more than £85,000 in the next 30 days

  • Your VAT taxable turnover of more than £85,000 over the last 12 months

If you’ll exceed the VAT threshold in the next 30-day period

You must register if you realise that your total VAT taxable turnover is going to be more than £85,000 in the next 30-day period.

You have to register by the end of that 30-day period. Your effective date of registration is the date you realised, not the date your turnover went over the threshold.

If you exceeded the VAT threshold in the past 12 months

You must register if, by the end of any month, your total VAT taxable turnover for the last 12 months was over £85,000.

You have to register within 30 days of the end of the month when you went over the threshold. Your effective date of registration is the first day of the second month after you go over the threshold

Voluntary Registration

You can register voluntarily if your business turnover is below £85,000. You must pay HMRC any VAT you owe from the date they register you.

HMRC offer certain VAT schemes that your business may benefit from: 

Flat Rate Scheme

Usually the amount of VAT a business pays or claims back from HMRC is the difference between the VAT charged by the business to the customers and the VAT the business pays on their own purchases. 

If you choose to operate using the Flat Rate Scheme the way your pay or reclaim VAT is different. 

On the flat rate scheme you pay a fixed rate to HMRC based on a % of your sales. You then keep the difference between what you charge your customers and what you pay over to HMRC. You can not reclaim the VAT on your purchases, except certain capital assets over £2000. 

Please contact us to discuss whether the Flat Rate scheme might be right for you.

Annual VAT Accounting Scheme 

The Annual Accounting Scheme allows you to pay VAT on account in either 9 monthly or 3 quarterly instalments. You then complete one VAT return which is used to work out any balance owed by you to HMRC, or repayment back to you from HMRC. 

You are eligible for the scheme if your estimated taxable turnover is no more than 1.35million. You can stay on the scheme as long as it remains below 1.6m.

Get in touch to discuss whether the Annual VAT scheme is right for your business. 

CIS Reverse Charge

The construction industry VAT Domestic Reverse Charge applies to supplies of construction work from 1st March 2021. Under this scheme the customer accounts for the suppliers output VAT. This measure only applies to construction supplies made by a business to another business. 

For more information about the CIS reverse charge please get in touch

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