Value Added
Tax (VAT) Advice
The Personal Tax Centre is a small, friendly, owner managed firm of chartered
certified accountants
serving small businesses and private individuals dealing with
Value Added Tax (VAT) and all other tax issues.
For a free telephone consultation, a quote or to have accounts prepared for Value Added Tax (VAT), please phone Stephen Maslin on 01202 399111 NOW!
VALUE ADDED TAX (VAT)
This tax is levied on relevant organisations who have an annual turnover in
excess of £67,000.
The Revenue can be quite particular about this limit.
There are two tests:
1 Has the turnover exceeded the registration amount in the last 12 months using a rolling total?
2 Will the turnover exceed the limit in the next 30 days?
If the answer to either of the two questions is YES then you will need to register within the next 30 days.
HOWEVER, BE WARNED – It is taking the Customs & Excise between 8-13 weeks to process a registration application!
Once you are registered you have two approaches to choose from:
1 Invoice basis – where you calculate the VAT payment amount by reference to the date that you issue an invoice, or,
2 Cash basis - where you calculate the VAT payment amount by reference to the date that you receive settlement of an invoice.
With the first method you could be paying the government their VAT before you have received the money from your customer.
There is also a Flat Rate approach which is the application of set percentages applied to your total turnover which is based upon nationwide averages and supplied by the Customs & Excise. Remember these won’t always be in your favour.
Remember if you go over the limit, then down again the Customs & Excise will deem you to
be automatically registered and collect the tax accordingly. If you go
under the limit later you are not automatically deregistered. Beware.
The current
deregistration limit is £65,000.
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