VAT
VAT
VAT (Value Added Tax) is a tax added to most products and services sold by VAT-registered businesses
Businesses have to register for VAT if their VAT taxable turnover is more than £90,000. They can also choose to register if their turnover is less than £90,000.
We help businesses in Birmingham with VAT registration, returns, and compliance. Whether you’re a Birmingham sole trader or a growing company, we simplify VAT for you.
Frequently asked questions
● Standard Vat accounting
● Flat rate scheme
● Annual Accounting
● Cash Accounting
Yes – if you are VAT-registered and the purchase is for business use, then in many cases you can recover (claim back) the VAT you paid on business inputs (“input tax”). You will need a valid vat invoice.
If VAT returns or payments are late, penalties or interest may be applied by HMRC. It is important to meet deadlines.
The Flat Rate Scheme is an option for smaller VAT-registered firms to simplify VAT accounting. Instead of calculating input VAT in detail, you pay a fixed percentage of your turnover. This can make things simpler though sometimes less beneficial depending on your vatable purchases.
Typically, VAT-registered businesses submit returns every quarter (every 3 months). The VAT return and any VAT due must be submitted and paid one month and seven days after the end of the VAT period.
Making Tax Digital” is an HMRC initiative requiring businesses (above certain thresholds) to keep digital records and submit VAT returns using compatible software. This applies across the UK, If you are VAT-registered and over the threshold, you need to use digital record-keeping
If your taxable turnover (i.e. the value of everything you sell that’s subject to VAT) in the UK exceeds a prescribed threshold, you must register. As of the most recent guidance, the registration threshold is £90,000.
Standard rate: 20% on most goods and services.
Reduced rate: 5%, applies in circumstances such as home energy, some children’s car seats, etc.
Zero rate: 0% for certain items (e.g. most food, children’s clothes) though these are still VAT goods, just taxed at 0%.
