VAT advice & planning

VAT is the most complex of all the tax regimes imposed on a business – so complex that so many businesses ignorantly overpay or underpay VAT regularly. There are tax planning opportunities still present in this law which we have utilised to benefit our clients.

We have benefitted our clients by effectively planning for VAT situations like these:

Recovery of VAT paid on goods/services, prior to the date of VAT registration

We can recover VAT on goods which were in use for the business on the date of VAT registration but were purchased up to 4 years before.

Similarly, VAT paid on any services acquired for the business up to 6 months before the date of VAT registration can be recovered.

Accurate classification as standard rated/zero rated/exempted supplies

We help in correctly identifying the goods sold by our clients as standard rated, zero rated or exempted for the purpose of VAT. This classification is very important because VAT treatment is drastically different for each class of product for example credit for input is allowed for standard rated & zero rated goods sale but not for exempted goods sale.

Can you correct VAT errors which have occurred in previous years?

If you overpaid/underpaid VAT, going back up to 4 years due to negligence or mistake, we can correct it now and bring your VAT A/C back in order. It is always better, if you can identify errors yourself rather than wait for HMRC to pick these up otherwise HMRC may levy interest and penalty on the amount of VAT underreported.

VAT Health check

To minimise the risk of any penalty being suffered by our clients, we keep a close eye on their VAT trends, keep proper documentation of returns submitted, make appropriate disclosures to HMRC at the appropriate times & identify the situations which may cause HMRC to raise an enquiry into their VAT affairs.

What is the best VAT scheme to get registered?

We select the VAT scheme which is best suitable for our client’s business on the basis of factors such as kind of product sold, amount of VAT as input cost, credit period given by/to customers/suppliers and so on. Popular schemes to get registered under VAT law are:

• Cash Accounting : Under this scheme, client pays VAT only when he has been paid by his customer and he takes input credit for purchase only when he has paid to his supplier.This scheme is more popular among new start-up businesses because it offers cash flow advantage.
• Flat Rate Scheme : In this scheme, client agrees to pay VAT at a fixed reduced rate set by HMRC for the kind of products/services sold. He charges VAT at a standard rate from his customers but take no credit of VAT on purchases.This scheme is suitable where the owner want to keep his VAT affairs simple & straightforward and there are not too many input costs to be incurred.
• Annual Accounting : Under this scheme client agrees to an annual VAT liability, based on the previous year’s figures, and settles this liability over a period of 9 months. The final return of the year is calculated on the basis of yearly sales & purchase and any balance, if due is paid or any overpayment is refunded by HMRC.This scheme is suitable for those businesses, which haven\92t got resources to reconcile their books every quarter but would prefer once in a year.
• Retailers Schemes : This scheme is designed for retailers where they can record their daily takings in total at the end of every working day and separate the VAT out on the basis of suitable VAT fraction.This scheme is suitable for those retailers where they do a number of small value transactions in the course of their business.

When should I get VAT registered?

It depends mainly on 2 factors:

• Are the customers of your business, VAT registered or not
• How much VAT cost are you incurring as an expense?

If the customers are VAT registered, it makes sense applying for VAT registration, otherwise it may make your goods/services expensive in the market

When is it compulsory to get VAT registered?

If your business sells taxable goods and/or services, and your turnover for previous 12 months is about to reach the VAT threshold in the next 30 days, you must apply for VAT registration.

Can you get VAT registered voluntarily?

You can get VAT registered voluntarily, even if you have just started trading. The advantages of getting VAT registered are:-

• It adds credibility to the business in a way that it make business look genuine. Some organisations mandate that their suppliers must be VAT registered.
• You can claim VAT you have paid as a part of purchases.

Bad debts VAT relief

We can claim back VAT on any debt owed by a customer, which is not paid, if it is more than 6 months but less than 3 years old.

Handling VAT investigations

We can plan & prepare proper documentation so that your business gets professionally presented in a VAT investigation. We have got former VAT inspectors in our team who have got plenty of experience of negotiating a complex situation and get the desired results.

How can we help If any penalty/interest is imposed in disputes relating to VAT

On the basis of our experience we can share, that in a lot of cases:-

• Orders given are simply erroneous because of HMRC’s incorrect interpretation of the law.
• The penalties imposed can be considerably minimised following a careful analysis of the issues involved.
• HMRC can be amenable and agreeable, if presented with a well reasoned argument citing the examples of case laws settled in the past.

In such cases of VAT investigations & assessments we take former VAT inspectors in our team, so we can effectively argue cases and get the desired results

To find out, how we can support your business, why not contact us on 0208 914 8887 for a Free, No Obligation Consultation. Success of your business is our business.