In theory VAT is a simple tax. You charge VAT to your customers. You get charged VAT by your suppliers. You take the second from the first and pay the difference to the taxman or, of course, claim it back. But, as with the rest of life, it is not that simple as shown by some of the disputes that went all the way to tribunal, such as the one concerning the sale of gingerbread men, and the other concerning Jaffa cakes. We will ensure that you do not fall foul of the regulations by explaining to you which transactions are:
- exempt from VAT
- VAT zero rated
- VAT standard rated or
- charged at another VAT rate such as the reduced rate.
We will also explain ‘flat rate’ and ‘cash accounting’ and the effects these differences will have on your business, and how you can mitigate any disadvantages that the rules may impose on you.
This complexity is particularly significant when looking at land and property. An error in this area can cripple a business, particularly in view of the size of each transaction. We will work with you to minimise this risk to your business. We will also ensure that you comply with the new “Making Tax Digital” regulations.
VAT can have a significant effect on other taxes such as stamp duty, and we will liaise with you to ensure that your affairs are arranged where possible to minimise these effects.
Whatever the size of your business you will be affected by VAT and you will need to consider that impact. We will ensure that your affairs are arranged in the most cost-effective way to mitigate that impact.
Companies must register for VAT if their taxable income exceeds £85,000 over the previous 12 months. Registration can be done online or through the post.