VAT services

vat returns services

Our VAT Services

Look nowhere else but only at MW Accounting Services if you need or look for reliable VAT services. We provide top quality and reliable VAT services to small businesses, both individuals and limited companies, in Bracknell and the surrounding areas. Our qualified accountants have years of experience in helping clients with their VAT needs. Our VAT services include:

  1. VAT registration
  2. VAT returns
  3. VAT registration cancellation 
  4. VAT schemes advice
  5. general VAT advice. 

VAT registration

Our VAT services will start by registering your business for VAT with HMRC. VAT registration can be either compulsory or voluntary. There are advantages of being a VAT registered business. And one of these is that if your business is VAT registered, then customers, suppliers and lenders tend to believe that your business turnover is above the VAT registration threshold. Further, they will assume that your business is more established too. Some companies may also prefer to do business with only VAT registered organisations because a non VAT registered business may be considered too small.

Compulsory registration

If your business taxable supplies exceed the VAT registration threshold (currently £85,000), then your business must register for VAT. You will be compulsorily registered for VAT if:

  1. for the last 12 months, your total VAT taxable supply was above £85,000
  2. in the next 30 days, you expect your taxable supply to be above £85,000

Taxable supply

A taxable supply is a supply made in the UK which is not exempt from VAT. A taxable supply for VAT includes supplies at:

Standard rate20%most goods & services e.g ice cream
Reduced rate5%some goods & services e.g radiators
Zero rate0%most food & children’s clothes, books

When your taxable turnover reaches the registration threshold and you fail to notify HMRC, then there will be penalty for late registration or for failing to notify at the correct time. The penalty is a percentage of the VAT due from the date you should have registered to the date HMRC either receives your notification of registration or becomes fully aware that you need to register. This percentage of penalty depends on how late the registration is.

Time taken to register% of penalty
late registration < 9 months5
9 months < late registration < 18 months10
18 months < late registration15

But there will still be a minimum penalty charge of £50. So it will be helpful if you keep records of your taxable supplies from when trading starts and with our quality VAT services, you will definitely avoid the late registration penalty.

Voluntary registration

You can, however, choose to have your business voluntarily registered even if your taxable turnover is below the VAT registration threshold. So the registration will help prevent the late registration and hence the penalty. And as a result of this registration, you can reclaim the VAT you pay on your purchases as well.

After registering, HMRC will issue a VAT certificate to your business, which will show your VAT number. This VAT number is needed when you file your VAT return and make VAT payments. 

If all of the following applies, you must register for VAT, regardless of your VAT taxable supply:

  1. you are not based in the UK
  2. your business is not based in the UK
  3. your goods or services are supplied to the UK (or expected them to be supplied in the next 30 days)

VAT deregistration

Similarly, VAT deregistration can either be voluntary or compulsory too. So if your taxable turnover is below £83,000 and you do not want your business to still remain VAT registered, then you may decide to cancel your VAT registration voluntarily . However, you must deregister from VAT if you:

  1. cease trading
  2. become part of a VAT group
  3. sell your business
  4. change the status of your business
  5. cease to make taxable supplies

Again, as part of the VAT services, we will degister your business from VAT with HMRC on your behalf.

VAT returns

And in addition to VAT registration, we will file your VAT returns with HMRC as well. VAT returns are normally submitted every quarter. The due date for a quarterly submitted VAT return is one month and 7 days from the quarter end date. So if your VAT quarter ends on 31 May, for example, we will submit your VAT return no later than 7 July to avoid a penalty.

If for some reasons, your VAT return is submitted late or it is filed on time but your VAT payment is late, then a ‘default surcharge’ will incur. The first time it occurs, HMRC will issue a warning, called a surcharge liability notice (SLN), to you. The notice lasts for 12 months, which is called a surcharge period. And if another default occurs during this 12-month surcharge period:

  1. a surcharge, which is a percentage of the unpaid VAT due, will be calculated
  2. HMRC extends the surcharge period to 12 months from the end of the quarter of default

Note: if your business has a taxable supply of £150,000 or less and the first time you are not able to pay your VAT on time, HMRC will send you a letter, instead of an SLN, offering help and support. However, if a default occurs again next time, HMRC will issue you an SLN.

Change of VAT period

Although VAT returns are usually submitted quarterly, you can ask to change your VAT periods from a quarterly submission to a monthly or annually filing as well and you can do this in one of the 2 ways:

  1. log into your VAT online account (you will need your Government Gateway ID and password) and request the change online
  2. fill in Form VAT484 and send it to HMRC informing them of any changes to your business details

Making Tax Digital (MTD) for VAT

In April 2019, HMRC has launched Making Tax Digital for VAT for VAT-registered businesses with taxable supply over £85,000. And from April 2022, the MTD is extended to all VAT-registered businesses with taxable turnover over and under the registration threshold. So all VAT-registered businesses must:

  1. keep their VAT records digitally
  2. file the VAT returns using only MTD-compatible software

This means there will no longer be manual input of any VAT records because every transaction must be digitally linked to HMRC. So as a result of MTD, if you are VAT-registered, then you must file your VAT returns using commercial MTD-compatible software because HMRC will stop providing their free VAT software.

However, some VAT-registered businesses may be exempt from MTD rules if HMRC is satisfied with their conditions, including disability and age. To ask for exemption, contact VAT: general enquiries .

VAT schemes

VAT schemes

As part of the VAT services, we can provide advice with VAT schemes. When registering for VAT, you can choose which VAT scheme to apply to your business. If you do not choose, the Standard VAT scheme will apply by default. But the scheme can be changed later if you think the other scheme suits your business better. Several VAT schemes include:

  1. Standard VAT scheme: under this scheme, input VAT (VAT on your purchases in the VAT period whether your suppliers have been paid or not) is deducted from your output VAT (VAT on sales or services you charge your customers). The different is the VAT you pay over to HMRC
  2. Flat Rate Scheme (FRS): you can join this scheme if your turnover (excluding VAT) does not exceed £150,000. To get the VAT due to HMRC, you multiply your gross sales by a fixed percentage of VAT rate. The percentage used depends on the industry your business is in. You are not allowed to reclaim VAT on your purchases except it is capital assets purchase such as computer worth £2,000 (including VAT) or more
  3. Cash accounting scheme: the calculation of VAT due under the cash accounting scheme is the same as the Standard VAT scheme but the difference is you only pay VAT on your sales when your customers pay you and you can reclaim VAT on your purchases when you pay your suppliers. To use this scheme, your taxable supplies must not exceed £1.35 million
  4. VAT retail scheme: you can join this scheme at the start of any VAT period and there is no need to tell HMRC. It allows you to calculate VAT on sales only once with each VAT return (instead of calculating it on every sale made). There are 3 standard VAT retail schemes you can choose from:
    1. Point of Sale Scheme (you record the VAT at the time of sale), it can be that:
      1. all sales are made at a single VAT rate so an apportionment is not needed as all sales are made at the same VAT rate
      2. when electronic or similar tills, which analyse sales at the point of sale into different VAT rate, are used
    2. Apportionment Scheme (you buy goods for resale):
      1. Apportionment Scheme 1: this is for retailers with annual sales (ex-VAT) of up to £1 million. The gross takings are split between different types of turnover. Each quarter, the calculations are made and at the end of the year, an annual adjustment will be calculated
      2. Apportionment Scheme 2: this is for retailers with annual sales not exceeding £130 million. It is based on expected selling prices (VAT inclusive) of goods bought for resale. So an annual adjustment is not required
    3. Direct Calculation Scheme (you make a small proportion of sale at one rate and a majority at another rate)
      1. Direct Calculation Scheme 1: this is for retailers whose turnover does not exceed £1 million per annum. It uses estimated selling prices. No stock and annual adjustment are required
      2. Direct Calculation Scheme 2: the turnover of retailers using this scheme must not exceed £130 million. At the end of each year an annual adjustment, using the whole’s year totals, is required
  5. Annual accounting scheme: if you use the annual accounting scheme rather than the usual quarterly VAT return submission, you will:
    1. file only 1 VAT return per year
    2. make advance payments toward your VAT bill
    3. either make a final payment or apply for a refund when filing the VAT return

Our VAT services

VAT services

Our team at MW Accounting Services will provide high quality and very reliable VAT services to businesses in Bracknell. With our skills and experience, we are certain that you will be happy with our VAT services. Contact us today to see how we can be helpful to your VAT needs and to advantage of our free initial advice!