Contained in VAT Returns are the estimates of sales and purchases, the amount of VAT that can be paid or reclaimed, and the VAT refund from HMRC. These Value Added Tax Returns are to be presented to HM Revenue and Customs (HMRC) – whether you have VAT to pay or not, you still need to do this. The amount payable to HMRC can be calculated as the amount of VAT due on sales deducted from the amount of VAT reclaimable on purchases. Meanwhile, VAT claims cannot always be made on purchases meant for entertaining clients or non-business use, for example. Also, there are strict penalties for errors in the VAT Returns; this is why hiring the services of an accounting firm is essential.
Going through the process of VAT Returns can be stressful. And having to go through it four times in a year can be tedious. In fact, when you have other things to spend time on in the business, it is best you look out for accounting service providers to handle this aspect of your business for you. Our clients know us to be reliable and dependable, and that is why we are trusted with managing VAT Returns. With Nordens, your time can be spent on your business while our teams of professional accountants provide you with VAT Return services. More than anything, Nordens carries out the duty of an intermediary between its clients and the HMRC.
You can complete your VAT Returns with us, and we are even prepared to assist with digital VAT Returns. We have the right resource tools in our accounting software to calculate your VAT Returns. Having helped you understand your VAT Return requirements, we will proceed to consider the payment scheme that works for your business structure (limited costs or unlimited costs), and we will see to setting your VAT period. All things being equal, Nordens will prepare and deliver your VAT documentation via post or electronic mail no less than the fifth or sixth day of the current month for the previous month.
Nordens premium service is designed to support you in your VAT Return calculations and formulations.
Our highly qualified ACCA accounting team can handle even the most complex VAT return situations.
VAT Liability Calculations
VAT Return Submission
Expert ACCA Accounting Advisors
Dedicated Account Manager
Here at Nordens, we know the struggle of understanding technical jargon. To help you out with the terms and the taxes, we have compiled the questions we get everyday:
Value Added Tax (VAT) is a tax charged on goods and services exchanged between a business and another, or a business to an end user. It is an indirect tax because a VAT registered business firm already paid for it to HM Revenue and Customs. This distributes the burden on the goods and services for which the tax was paid at a rate that is applicable to each unit. For example, if a shirt is sold for £50 and the rate of VAT is 20%, it means the sum of £10 is payable to HMRC.
A business can claim Valued Added Tax on items purchased up to four years before registering, and even services as far as the six months that preceded registration. Nevertheless, be aware that the need to claim VAT depends on your circumstances. It could be any of the following:
• When you realize that bills have been omitted in your VAT workings
• When you have newly registered for VAT
Given any of the above circumstances, HMRC allows you to claim back VAT. However, you must be able to provide proof-like receipts.
As an accountancy firm, what we first try to make our clients understand is that there is a limit to what can be reclaimed. Usually, VAT can be reclaimed on goods and services purchased strictly for business use. Thus; VAT can be reclaimed on office gadgets like laptops, stationery, parking lot costs, car rentals, gifts purchased for employees, to name a few. On the other hand, you can also reclaim VAT on any personal item that is being used for the business. For example, if you work from home and you had to set up an office, you can claim VAT on the space being used for the businesses related activities.
VAT has different charge rates depending on the type of goods and services. In countries like the United Kingdom where Value Added Tax is used, some goods and services may enjoy exemption. In this scenario, such goods and services are zero-rated, or in other terms, no Value Added Tax rate applies to it. Usually, they are domestic items which are never out of daily use. Examples of goods and services that are zero-rated include the following:
• Food items and beverages
• Goods and services given to charity organisations
• Training/work equipment for the disabled
• Water and waste transportation services
• Books and other readable items like newspapers
There are also rules that apply to VAT on business vehicles and the fuel purchased to run them: if a company pays for business fuel, VAT charges are applicable. This is otherwise described as a fuel scale charge, and it depends on the capacity of the vehicle. Since VAT can be paid on business fuel, it can also be reclaimed. On the other hand, if the mileage covers private and business activities, you have to pay the appropriate fuel scale charge for your vehicle. Above all, do not forget to keep a record of the mileage.
• 20% as the standard rate
• 5% as the reduced rate
• 0% as the zero rate
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In November 2002, having sold our other business interests off earlier in the year, I decided to set up Nordens Chartered Accountants. The easy part was knowing how to do it, as I had established and built a smaller practice a few years earlier. The difficult part, for me, was not following the traditional accountancy path. Having run businesses, both successfully and unsuccessfully, I wanted to help business owners resolve their short term problems and work with them to achieve their longer term goals. Business has always been my interest and I love that I can help business owners achieve what seems like the impossible every single working day.
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