A question commonly asked to tax accountants is whether a company should register for VAT.
When their VAT turnover exceeds the VAT threshold, which now stands 85,000 nevertheless, Firms have to register, there might be advantages for registering in case you fall under this threshold.
When to enroll
In case your VAT turnover in a year will be much more than 85,000, then you have to register your company using HMRC for VAT.
VAT turnover is the value of all.
So you need to check on the HMRC site for the threshold changes from year to year. Also note that the calculation is implemented into some rolling 12-month interval, not a predetermined 12-month tax season or calendar year.
You’ll have to enroll at the conclusion of the period when you realize your VAT turnover will transcend £85,000 in the upcoming period.
As an instance, if on the 1st September you understand your VAT turnover will take you within the threshold, you would have to enroll by the 30th of September. Even though, your date of enrollment is the 1st of September.
Once you went across the brink if you discover you’ve surpassed the VAT threshold you have to enroll within 30 days of the close of the month. After you go over the threshold, your date of enrollment is the first day of the month.
You can enroll online by producing VAT online accounts, otherwise called ‘Government Gateway account’. An account is essential to be able to file your VAT Returns.
Or you can appoint a person to handle your HMRC responsibilities and to file your yields. By way of instance, an agent or an accountant.
You will want to select which method to use When you’ve enrolled.
There are 3 schemes
Sales and invoices statements to file your Return where you maintain a record of your buy.
This is where you maintain a record of the payments you get and also these payments you make. The VAT is accounted to the payment date. This can be an alternative since you won’t need to pay VAT until you have already been paid if you have payment terms or slow creditors.
Flat Rate Accounting
Here, you cover a proportion of your overall turnover (earnings ) but you don’t claim the VAT back to your own daily purchases. Is based on the business. You don’t account for the detail in your VAT Return although VAT on your own bills still charges in the manner.
You are able to claim the VAT back for purchases. That is a time limitation to claims that are backdating;
- 4 decades to get products you have, or which were used to create other products you nevertheless have
- 6 weeks to get any services you’ve paid for
Changes to your information
It’s your duty to make sure your VAT registration details are kept current. Changes have to be produced within 30 days of these modifications and could be made by post or with your account.
Changes could include;
- Business name, trading name or address of the Company
- Modifications to your own accountant or broker who looks after your VAT
- into the members of a venture, such as a title or home address changes
Changes to bank details have to be produced beforehand.
Cancelling VAT Registration
Your VAT registration can be canceled by you in case you, This threshold varies from year to year.
You may cancel online.