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VAT – Our Top Tips

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  1. Regularly review your VAT registration position

If you are not registered for VAT, you should regularly review your turnover to ensure you register for VAT at the right time to avoid late registration penalties.

  1. Voluntary VAT registration

If you are not registered for VAT and you are trading below the VAT registration threshold, (currently £85,000), consider if voluntary VAT registration would be beneficial. For example, a business who would be making zero-rated supplies if registered for VAT may benefit for VAT registration because, although they wouldn’t be charging VAT on their supplies, they may be able to recover VAT on expenditure.

  1. VAT registered, but trading under the registration threshold

If you are registered for VAT and trading below the VAT registration threshold you should consider if it would be beneficial to deregister. For example, a builder whose customers are mainly private individuals will gain a competitive advantage by not having to charge VAT on his services.

  1. Making Tax Digital compliance

Ensure your business is MTD compliant to avoid penalties.

  1. On-time VAT return submission and payment

Ensure all VAT returns are submitted, and liabilities are paid on time to avoid late submission and payment penalties. Setting up a direct debit is a useful way to avoid late payments.

  1. Make sure you are getting it right

Regularly review your VAT to ensure you are getting it right and taking advantage of any reliefs or special schemes available to you.

  1. VAT schemes

Consider whether the cash accounting scheme or the flat rate scheme would be beneficial.

  1. Land and property

Always take professional advice when buying or selling property. The rules are complex and the costs of getting it wrong could be significant.

  1. Exporters

If you export goods from the UK, ensure you obtain and retain the required evidence that the goods have left the UK in the required time limits to avoid having to pay VAT on the sale.

  1. Importers

Consider using Postponed VAT Accounting as it can provide a cashflow advantage.

  1. Online retailers

Should take advice if they are trading abroad to ensure they are meeting VAT registration requirements outside of the UK.

  1. Charity reliefs

Charities should ensure they are taking advantage of the reliefs available.

  1. Partial Exemption special methods

Partially exempt businesses should regularly review the partial exemption method being applied to ensure it remains relevant.

  1. Bad debt relief

Regularly review debts due which are over six months old and recover VAT accordingly.

If you have any VAT queries that you need help with, get in touch with our expert VAT Team.