Award-winning chartered accountants

VAT Returns

The VAT Experts

Value Added Tax Returns is to be presented to HM Revenue and Customs (HMRC) every accounting period (precisely three months). Whether you have VAT to pay or not, you still need to do this. Contained in the VAT returns are the estimate of sales and purchases, amount of VAT that can be paid or reclaimed and the VAT refund from HMRC. 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 be made always on purchases meant for entertaining clients, car or non-business use. We also like to inform you that there are strict penalties for VAT returns errors and an actual 15% penalty for undeclared errors. This is why hiring the service of an accounting firm is essential. Of course, errors may not be absolutely avoided but the rate of occurrence is minimal,

There are various VAT rates which we also use to help our clients calculate. They are:

  • 20% as the standard rate
  • 5% as the reduced rate
  • 0% as the zero rate

Going through the process of VAT returns could be stressful. Having to go through the demand for four different 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.

Nordens is available to guide you through the process which for many can be really complicated. But you don’t have to worry about getting it done because we have the expert service that you want. You can run your VAT return with us and we are glad to inform you that we are prepared for digital VAT returns. We have the right resource tools on our accounting software to work out your VAT returns.

Having helped you understand your VAT returns requirement, we will proceed to consider payment scheme that is good for your business structure (limited costs or unlimited costs), 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 not less than the fifth or sixth day of the current month for the previous month. We try to prepare ahead because of the stress usually involved in paying on the last scheduled date. Also, we fully understand how costly any delay could be. Our clients know us to be reliable and dependable, that is why we are trusted with managing VAT return.

With Nordens, your time can be spent doing other things on our 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. Thanks to our consistent support system, we have been able to establish a quality link between the parties on each side.

What is VAT?

Value Added Tax (VAT) is a tax charged on goods and services exchanged between a business and another or the 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 and 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 aold for £50 and the rate of VAT is 20%, it means the sum of £10 is payable to HMRC.

When does a business need to claim VAT?

A business can claim Valued Added Tax on items purchased up to four years before registering and even services as far as six-month that precedes registration. Meanwhile, 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 and you have been under claimed as a result.
  • When you are newly registered for VAT.

Given any of the circumstances above, HRMC allows you to claim back VAT. However, you must be able to provide proofs like receipts.

What can I reclaim VAT on?

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 laptop, stationery, parking lot, car rentals, gifts purchased for employees, among others. 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.

What items are zero-rated?

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. That is 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
  • Drugs
  • Water and waste transportation services
  • Books and other readable like newspapers
Do I pay VAT on fuel?

There are rules that apply to VAT on business vehicles and the fuel purchased to run them. If a company pays for business fuel, VAT charges is applicable. This is otherwise described as 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 record of every mileage covered.