You may know nothing about VAT Accounting, but it doesn’t mean that you should remain ignorant. If you are a VAT taxpayer, the more you know about any of it, the more benefit you and your business can derive from it. Listed below are five essential things that you need to know about VAT Accounting.
1 – VAT Registration and De-Registration
How do you know whether you should register or de-register for VAT? If your turnover is more than �68,000 each year, you must sign up for VAT. If your turnover for the year is under �66,000, you’re allowed to de-register. Once you’ve registered for VAT, that’s when a VAT consultant will be useful to you. They are able to advise you on the most recent regulations and keep you as well as your business on the nice side of HM Revenue and Customs.
2 – VAT Schemes
Businesses which are registered for VAT need to account for tax if they invoice customers or when their own suppliers invoice them. HM Revenue and Customs has a amount of VAT schemes that allow your business to save time or only take into account VAT when they are in fact paid. To work through which scheme bests fits you, seek the expert advice of a skilled VAT advisor.
3 – VAT Records
It is your legal and mandatory obligation to help keep accurate VAT records regarding any tax paid or received. You should keep these records for a set period of time and you can find penalties for poorly kept records. Keeping accurate VAT records allows you to avoid paying too much tax. For more information about keeping accurate VAT records, talk with a VAT accounting specialist.
4 – VAT Responsibilities
Have you any idea what your VAT responsibilities are? Or even, you can fall foul of the VAT penalty system. Financial Cube will let you know your VAT responsibilities and enable you to stick to them. You don’t need to be a VAT expert when you have a VAT adviser, they’ll keep you informed of all your responsibilities regarding Value Added Tax.
5 – VAT Penalties
As of 2009, a brand new VAT penalty system is set up. There are two scenarios under which a penalty will apply. The foremost is in the case of failure to notify about an under-assessment. This occurs when a VAT Return isn’t submitted and Customs need to estimate the assessment. If this assessment is leaner than the actual figure it should be and the taxpayer will not inform HM Revenue and Customs, a penalty is liable.
Second, when someone submits a document which includes an error, this will also trigger a penalty. One when reasonable care had not been taken will be punished with 30% penalty. One which is deliberate however, not concealed from HM Revenue & Customs will be punished with a 70% penalty fine. Finally, one that is deliberate and where concealment can be proved can lead to a 100% fine. By using a professional VAT consultant, you can avoid making mistakes and paying the purchase price for it.
