What is VAT ?

VAT - Value Added Tax

Most businesses once they reach £90,000 turnover within 12 months would have to register for VAT ✔️

Once VAT Registered

Sales 🟰 Net Sales + Output VAT

Please note with either

Standard invoice ☑️

Cash ✅

Annual ✔️

The Output VAT charged has to be paid across to HMRC

However, before the VAT Calculated is due or a refund occurs

A business can legitimately claim the VAT on expenses 👇

Purchases/overheads 🟰 Net + Input VAT

• Please note that VAT can be only claim if supplier invoices 🧾 are available

So the VAT boxes are completed 👇

Box 1 : Output VAT

Box 2: EU VAT

Box 3: Total Output VAT

Box 4: Input VAT

Box 5: VAT Due or Refund

Box 6: Net Sales

Box 7: Net Purchases/overheads

Box 8: Foreign net sales

Box 9: Foreign Net purchases

On some occasions HMRC May enquire 🧐further and hold back any refunds.

HMRC have the right to go back 4 years during a VAT enquiry/compliance check so it is important to be compliant and keeping all records in order

Cloud software such as

Xero ✔️

Sage ☑️

Quickbooks ✔️

Freeagent ✅

Other alternatives ✔️

Is usually the way forward with the benefits of automation and information being readily available but for smaller businesses

Excel or equivalent ✔️

Manual records ☑️

Is possible to complete the VAT but it probably would be advisable to use cloud software in order to submit through MTD (Making Tax Digital)

If you are planning to register for VAT either on a

Voluntary 👍

or

Mandatory Basis ✅

Please feel free to reach out to us

Tel: 01212825234

Web: www.secureaccountsltd.co.uk

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