Copyright 2010 Bowyer Pounds & Co Ltd. All rights reserved. Registered in England and Wales No. 4134290 Vat Registration No. GB 770 0663 41 Website designed by Kent Korkers
VAT is a tax. It is a tax that is added to the cost of your sale. When you make a
sale for say £1,000, you charge your customer £1,200. The additional £200 is not
your money, it belongs to HM Revenue & Customs. At the end of each period, which
is usually a quarter you have to hand over the VAT you have collected. If during
that period you have incurred business expenses which themselves carry VAT you can
reduce the amount you pay to HMRC by the VAT which you have paid out to your suppliers
Should I be VAT registered?
A business that has a turnover in any 12 month period in excess of £73,000 - always
measured to the last day in a month - must register for VAT. Sometimes a business
does not have to register but it is worthwhile registering voluntarily.
Is that all there is to it?
The above paragraphs are only an outline of the current VAT system. There is of course
a lot more to it than that. We have not mentioned that some sales are exempt, that
there are three different rates of VAT, nor have we mentioned that there are a number
of different VAT schemes a business can join. Some of these can save you money and
are worthwhile joining, others are not.
We can advise on all aspects of VAT including; VAT registration, operating VAT and
the different schemes available including cash accounting, date of supply, flat
rate scheme, retailers schemes etc. When the time is right we can also advise about