VAT Returns

Sales Tax

Simplify your VAT returns with our expert help. We ensure your VAT returns are filed on time, pay only what you owe, and even help you reduce taxes while staying compliant with HMRC rules and regulations. Our team thoroughly analyse your business transactions to give you the best advice possible. With us taking care of the VAT details, you’re free to focus on growing your business, knowing our expert tax advisors manage your taxes.

Value-added tax (VAT) is something every business owner should be familiar with because of the impact it may have on revenue. Within the borders of the European Union (EU), a value-added tax known as VAT is applied to every purchase of goods and services. You are responsible to the government for paying the VAT as a business owner. However, you can also claim back any VAT you have already paid on costs related to your business. Peer Accountants can help you claim back any VAT you are entitled to and ensure you pay the proper amount. Due to their extensive knowledge and training in VAT, our team is skilled at identifying errors and making any required corrections before submitting your returns.

Frequently Asked Questions

What is VAT?

VAT is a tax added to the price of goods and services. Businesses registered for VAT charge it on sales and can reclaim it on their expenses. The difference is paid to HMRC regularly.

If your VAT taxable turnover for the last 12 months was over £85,000, or you expect it to go over in the next 30 days, you must register for VAT in the UK. You must also register if you are based outside the UK and supply goods or services to the UK. You can voluntarily register for VAT if your turnover is less than £85,000, and you must pay any VAT you owe to HM Revenue and Customs from the date they register you.

In the UK, VAT-registered businesses may need to charge VAT on goods or services they sell, known as “output VAT,” while also paying VAT on goods or services they purchase, known as “input VAT.” The difference between output and input VAT is paid quarterly to HMRC. Businesses can reclaim input VAT paid on business-related purchases to reduce the amount owed. Therefore, keeping accurate records of VAT-related transactions is important to ensure correct payments and claims.
A VAT number is a unique identifier assigned to a business when registering for VAT with HM Revenue and Customs (HMRC) in the UK. The number is used to identify the business for VAT purposes and is required on all VAT invoices issued by the business. The VAT number consists of a two-letter country code and a series of numbers identifying the business.
The UK has three VAT rates – standard rate (currently 20%), reduced rate (currently 5%), and zero rate (0%) – and the amount you charge depends on the goods or services you provide. It is crucial to charge the correct VAT rate to avoid penalties from HM Revenue and Customs (HMRC). At Peer Accountants, we can provide comprehensive advice on how much VAT to charge for each product or service, ensuring you pay the correct VAT and avoid penalties for submitting incorrect VAT returns to HMRC.
As a business owner, you may be eligible to claim VAT on purchases made for your business. This is referred to as “input tax.” To claim VAT, however, you must be registered for VAT with HMRC, and the goods or services you are claiming must have been purchased for business purposes. Some goods and services are exempt from VAT or have special rules, so you must check with a professional accountant to be sure you can claim VAT.

Yes, you can claim back VAT on purchases made before you registered for VAT if they were made within the period allowed by HMRC, which is up to four years for goods you still have and up to six months for services. These are known as pre-registration expenses. However, certain conditions must be met to claim back the VAT, and you must have valid VAT invoices or receipts as proof of the VAT you paid. Therefore, seeking advice from a professional accountant or tax adviser is important to ensure you meet all the requirements and claim back the correct VAT amount.

You can claim VAT on certain expenses incurred for your business. These expenses must be directly related to your business activities and used for business purposes only. Examples of business expenses you can claim VAT include office supplies, rent, equipment, and travel expenses. However, keeping accurate records and receipts of these expenses is important to claim the VAT back from HMRC.

If you make a mistake on your VAT return, you must correct it immediately. The procedure for correcting a mistake on a VAT return depends on the nature of the mistake. You should correct your next VAT return if the error was accidental or due to an oversight. If the mistake was deliberate, you must notify HM Revenue and Customs (HMRC) immediately and submit an amended VAT return. If the error results in an underpayment of VAT, you may be liable for penalties and interest charges. Therefore, it’s important to take corrective action promptly and seek professional advice if unsure how to proceed.

If your business’s taxable turnover falls below the de-registration threshold, you’re closing or selling your business, undergoing a change in business structure, or you stop making VAT taxable supplies, you can cancel your VAT registration. You can complete the cancellation process online through the tax authority’s portal or by submitting a paper form. It’s important to consider the timing of your cancellation carefully because it affects your final VAT return and the VAT you can claim on purchases up to the cancellation date.

Before proceeding with VAT de-registration, it’s crucial to understand the potential implications for your business. This includes the inability to reclaim VAT on business purchases moving forward. To finalise the cancellation, you need to submit a final VAT return and get approval from the tax authority. It’s recommended to consult with a tax professional who can provide valuable insights into how VAT de-registration affects your business and ensure the process is managed correctly.