One of the core offerings of our fabulous bookkeeping business is our VAT return services, which help a whole host of companies throughout Essex and beyond pay the right amount of VAT to HMRC. Without our amazing VAT return services, these companies could end up paying more than they need to HMRC, and who on earth would want to pay MORE tax than they need to? Certainly not people we want to associate with, that’s for sure. But we digress. We are here to discuss what exactly VAT is, and why it is essential for businesses to get it right! If you are a business owner who has heard of VAT returns, and know it’s important, but have been unsure as to exactly what it means (and have been too scared to ask), 123 Easy Books have got your back.
As experts in VAT return services, we have decided to elevate ourselves to legendary status in your eyes by explaining exactly what VAT is all about. So grab yourself a cuppa, get comfortable and enjoy this blog (well, as much as you can enjoy a blog on VAT…)
What is VAT?
Value Added Tax, or VAT as it is usually referred to, is a tax added by the government to nearly all products and services that are sold by a VAT-registered business. A business HAS to register for VAT if its annual turnover is more than £85,000. If a business has an annual turnover of less than £85,000 they can still choose to register for VAT, but it isn’t compulsory. VAT is charged at 3 different rates depending on the goods or services, but is typically charged at 20%.
VAT is normally charged on things such as:
* Goods and services (anything other than supplying goods is considered a service)
* Loaning or hiring goods
* The sale of any business assets
* Commission
* Any item sold to staff (including canteen meals)
* Any business goods that are used for personal reasons
* Non-sale items (such as bartering, gifts or part exchange)
Once you are a VAT-registered business you are obligated to comply with the following:
* Include VAT in the price shown of any products or services you offer
* Keep accurate records and receipts of how much VAT you pay when purchasing items for your business
* Ensure you account for VAT on any imported goods from outside the UK
* Accurately report the exact amount of VAT you have charged your customers, plus the amount of VAT you have paid other businesses. You do this through a VAT return (more information on this below under “What is a VAT return”)
* Pay the correct amount of VAT to HMRC
Will I always have a VAT bill to pay?
Businesses may not always be liable to pay VAT, it all depends on your VAT returns. Typically, the VAT you owe HMRC will usually be the difference between the VAT you have paid to any other business for their goods or services, and the VAT you have charged your customers. Basically, if you have charged more VAT than you have actually paid, you will need to pay the difference to HMRC. If you have paid more VAT for goods and services than you have charged your customers, then you may be actually owed money from HMRC. Don’t worry, we understand that this is a little confusing for some. Fortunately, as the best bookkeeping business in the area, we love this kind of thing. No, we really do! Don’t believe us? Well, why not contact our friendly team of VAT experts who offer amazing VAT return services! We guarantee our VAT return services will give you the peace of mind that those lovely guys at HMRC are happy!
What is a VAT return?
A VAT return is a form showing all of your business transactions, including any product or service you have bought that included VAT, and any goods or services you have sold that included VAT. Your VAT return will then show how much VAT your business owes to (or is owed by) HMRC. Businesses normally submit a VAT return to HMRC quarterly (every 3 months), so at the end of each financial quarter. By submitting regular and accurate VAT returns you ensure your business is paying the correct amount of VAT, avoiding an unexpected VAT bill, which if unchecked could be crippling for your business. You may not be a VAT expert, but we are sure you know that “unchecked”, “bill”, “crippling” and “business” should never be in the same sentence!
Where can I get the best VAT return services for my business?
So hopefully now you know exactly what VAT is and how accurate VAT return services are essential to the ongoing success of your business. But what now? Well, if you’re not expecting us to now tell you to get in touch with the best bookkeeping business in Essex, that also offers the best VAT return services in Essex, we obviously haven’t been blowing our own trumpet enough in this blog! Get in touch with 123 Easy Books, we guarantee our team of professional number lovers will ensure your VAT is never an issue with our expert VAT return services!
