| Practically all transactions carry a VAT charge. Value | | | | to apply for 'voluntary registration'. |
| Added Tax (VAT) is levied on most business | | | | Accountants in Liverpool may point out advantages in |
| transactions and on a lot of services and goods. | | | | registering such as...more credibility;potential savings if |
| | | | | your supplies are zero rated but you can still reclaim |
| There are three rates of VAT in the UK: | | | | VAT on your purchases;potential savings if you mainly |
| 15% (the 'standard' rate) | | | | supply other VAT registered businesses who don't |
| 5% ('reduced' rate) and | | | | mind being charged VAT and you can then still reclaim |
| 0% ('zero' rate). | | | | VAT on your purchases. |
| You will probably have to register for VAT if any of | | | | This does however have to be weighed up against |
| the following apply... | | | | the hassle factor of completing VAT returns, and |
| | | | | paying the VAT due every quarter. If you supply the |
| The taxable turnover of your business in the previous | | | | general public you will probably not want to register as |
| 12 months reaches the VAT registration limit | | | | this simply puts your prices up by 17.5%. |
| (£68,000 from 1/5/09), although you can also register | | | | |
| on a voluntary basis if your turnover is below this. | | | | VAT Schemes |
| You think your monthly revenue will exceed the | | | | There are various VAT schemes, mainly for small |
| registration limit. | | | | businesses... |
| You take over a business as a going concern whose | | | | Cash accounting - If your taxable turnover is under |
| turnover meets the conditions of the previous two | | | | £1,350,000 a year Liverpool accountants could help |
| points. | | | | set accounts for VAT on the basis of cash received |
| You buy goods from other EU countries to a value | | | | and paid, rather than the invoice date or time of supply. |
| above the registration limit in one calendar year. | | | | Annual accounting - Its possible to fill out one VAT |
| There are penalties for failing to register on time. | | | | return per annum instead of quarterly when your |
| Goods and services liable to VAT are known as | | | | turnover is under £1,350,000. You need to pay nine |
| 'taxable supplies'. Once registered you must charge | | | | payments on account throughout the year, and a |
| VAT on all taxable supplies. | | | | balancing payment with the VAT return. |
| VAT doesn't apply to everything. | | | | Flat rate scheme - This is for businesses with a |
| Supplies which are specifically not subject to VAT are | | | | turnover of under £150,000 and saves on |
| referred to as 'exempt' and include: insurance, financial | | | | administration as you just pay a set percentage of |
| services, postal services, health and education, although | | | | your VAT inclusive turnover based on your business |
| there are exceptions in every category. | | | | sector rather than accounting for VAT on each |
| | | | | individual "in and out". It can also reduce the VAT you |
| The amount of VAT payable to Revenue and | | | | pay in some situations. |
| Customs is the difference between your output tax on | | | | Retail schemes - These apply to retailers and provide |
| your sales and input tax on your purchases. Where | | | | a choice if it's not practical to issue invoices for a large |
| input tax is greater than output tax, a refund could be | | | | number of supplies direct to the public. |
| due. The VAT due is normally payable each quarter | | | | How Liverpool accountants Can Help You |
| after submission of a VAT return, although under | | | | Accountants in Liverpool are able to help you |
| certain schemes the payments can be made monthly. | | | | with...registering for VATadvising on suitability of VAT |
| | | | | schemeshelping completion of VAT returnssetting up |
| Should you register? | | | | your accounting system to deal with VATrepresenting |
| Your Liverpool accountants may advise on the | | | | you in any disputes with HM Revenue & |
| following point. Where revenue falls below £68,000 | | | | Customsproviding VAT planning advice for complex |
| its not neccessary to register but you may be eligible | | | | transactions for example when purchasing property. |