Filing your VAT returns can often be confusing and overwhelming. Our tax accountants in the UK have a solution.
Apart from knowing how to properly compute for it, you also have to take note that the actual VAT rates can sometimes change.
If you’re not careful, there’s a good chance that you’ll completely miss the mark and have to start over.
To prevent that from happening, it’s essential that you keep yourself updated with the latest VAT rates. Only by doing this will you be able to ensure that your accounts and invoices are always accurate. Let our tax accountants figure out a solution for your tax-related issues.
Tax accountants Guide: What is VAT?
Value Added Tax (VAT) is imposed on the sale of goods and services in the UK. It is a form of consumption tax because it is charged on items that people purchase as per our tax accountants. VAT is also an indirect tax that is collected by businesses on behalf of the government.
Businesses with a turnover of more than £85,000 must pay VAT on the products or services that they buy and sell. Other companies can choose to register for VAT as they wish.
No VAT– Know more by involving our tax accountants
Certain business transactions are exempt from VAT. For example, bank transfers, employee wages, and tax payments have no VAT applied to them, which means that you don’t need to declare them when filing your VAT returns.
A standard rate of 20 per cent
Suppliers who charge the standard rate of VAT will provide you with an invoice or a receipt that shows the amount of VAT deducted. It covers all transactions unless it falls under some of the other categories that will be discussed in this post.
Reduced rate of 5 per cent
The reduced VAT rate of 5 per cent is applied to light and heating bills. It is also charged on sanitary products.
Zero-rated sales and purchases are those that have VAT applied to them but at a rate of zero per cent. However, they’re not technically VAT-free. The zero rates include expenses such as flights, train travel, books, and newspapers. Let our tax accountants explain it even further.
If your business sells items outside of the UK, the zero rates will also apply. If you make a sale to a non-VAT registered EU business or a general member of the public, you will get a standard-rated VAT.
There are business transactions that are exempted from VAT. Some of the expenses that fall under this category are your insurance, finance and credit charges, and royal mail postage. Because they are exempt, these expenses should not be included in your VAT return.
These are the VAT rates that you should keep in mind when you’re filing a VAT return. You can also use a VAT calculator online to make the process so much easier.
Filing a VAT return can be a lot to handle for a business owner since you already have your hands full with so many responsibilities. The best way to go about this is to invest in an affordable accounting service that can help you sort out your VAT returns and other taxes. Trusting your VAT returns to an expert can eliminate errors and make the entire process much faster.
If you’re looking for affordable accountants in London to help you with your VAT Return, Cheap Accountants in London can help you out. Contact us today to set up an appointment.