VAT Advice For The Self-Employed

VAT Advice – What Is VAT?

VAT (Value Added Tax) is a tax on goods and services paid to HMRC (Her Majesty’s Revenue and Customs). The amount of VAT one business has to pay depends on the type of business and how much the business sells in goods and services. If your business has a turnover of over £82,000, you have to register for VAT.

Registering VAT

You can register for VAT online, via post or with an accountant. If you choose to register via post then you can collect the relevant forms from an accountant. They will be appointed your agent and from there they will submit the VAT Returns and general tax matters on your behalf. The online registration requires you to open an online account with the HMRC website. You will need this account for future VAT Returns.

Once you have registered with HMRC, you will be given a certificate with your company’s VAT information. This includes your VAT identification number, a date to inform you when to submit your first VAT Return and your effective date of registration.

Be aware that HMRC frequently alters rules on the registration form. Make sure you read any updates to ensure that you don’t find yourself in any trouble.

When Should You Register?

It is compulsory to register for VAT when your turnover has passed the threshold (£82,000 per annum). You must also register if you are receiving goods from the EU that are valued at more than £82,000. If you forecast that your business will pass the threshold within a 30-day period, you are expected to register for VAT.

The Flat Rate VAT Scheme

If your business has an annual VAT taxable turnover of below £150,000, you may be eligible to apply for the flat rate scheme. Here you can pay the VAT at a fixed percentage, depending on the type of business you own. The benefits of the flat rate scheme include: receiving 1% reduction in the first year of VAT registration, there is no need to record the VAT charge on each individual sale and purchase, meaning you spend less time organising paperwork and there is less chance of any mistakes you might make.

If you would like to know more about VAT, or you would like to register your business, speak to an expert and contact Aston Black today.

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