Services
VAT returns and registration, under Making Tax Digital
VAT registration, quarterly returns filed through Making Tax Digital software, and advice on which VAT scheme suits your business, with the VAT account reconciled every quarter, not just totalled.
In short
A business must register for VAT when its taxable turnover in the previous 12 months goes over £90,000, or when it expects turnover in the next 30 days alone to exceed £90,000. Most VAT returns are quarterly and due, with payment, one month and seven days after the end of the period.
What the service includes
- VAT registration, including the choice of effective date and VAT scheme.
- Quarterly or monthly VAT returns filed through Making Tax Digital compatible software.
- A reconciliation of the VAT control account each quarter, so errors are found before HMRC finds them.
- A review of zero-rated, exempt and outside-the-scope supplies, and of reverse charge rules for construction services and imported services.
- Correction of past errors, voluntary disclosures and deregistration when turnover falls.
Choosing a VAT scheme
| Scheme | Who can join | Worth considering when |
|---|---|---|
| Standard accounting | Any VAT-registered business | The default. VAT is due on invoices raised, whether paid or not. |
| Cash accounting | Taxable turnover up to £1.35 million | Customers pay slowly. VAT is only due once you have been paid. |
| Flat rate scheme | Taxable turnover up to £150,000 | Costs are low and you are not a limited cost trader, where a 16.5% rate applies. |
| Annual accounting | Taxable turnover up to £1.35 million | You want one return a year and fixed interim payments. |
Penalties
Late VAT returns earn penalty points. For quarterly filers, a £200 penalty is charged once four points are reached. Late payment penalties are charged as a percentage of the tax still unpaid, and interest runs from the day after the deadline. A reconciled VAT account and a fixed filing calendar avoid both.
Thinking about registering?
Registration is not always bad news, and voluntary registration can make sense if your customers are VAT-registered businesses. Our VAT registration guide explains the two tests, the timing and the choices.
Common questions
Questions we are often asked
£90,000 of taxable turnover. You must register if turnover in the last 12 months went over £90,000, or if you expect turnover in the next 30 days alone to go over it. The historic test is checked at the end of every month.
Yes. A business below the threshold can register voluntarily. It can make sense when customers are VAT-registered businesses that can reclaim the VAT, or when you pay a lot of VAT on costs.
Usually one month and seven days after the end of each VAT period, for both the return and the payment. Most businesses file quarterly through Making Tax Digital compatible software.
HMRC can charge VAT from the date you should have registered, as well as a penalty. Registering as soon as the problem is found, and correcting prices and invoices, keeps the cost down. We can calculate the exposure and handle the correction.
Contact
Bring us last year's accounts and we'll tell you what we'd change.
An initial conversation takes half an hour and costs nothing. If we are not the right practice for you, we will say so.