VAT Return Tips to Save Money and Time for your business
1. Pay on time VAT
Avoid penalties by paying VAT on time. You will get paid a percentage of the unpaid VAT by HMRC at the due date, if your VAT return is late. You will not be charged if it happens first time but a warning will be issued instead. And if it repeats within the next 12 months, an assessment to settle on a surcharge of up to 15% will be prepared. It is a valuable tips to save money and time for your business.
2. Charge the proper VAT amount
You must make sure that you apply the right amount as there are different types of tax. Charging 17.5 percent, 5 percent, 0 percent or exempt can make a noticeable difference to your profit margins. Ask for expert advice from a VAT consultant, if you are not sure about the vat charge. It helps to save money and time.
3. Pay online VAT
The due date for the return and payment can be extended by an extra seven calendar days, if VAT is paid online.
4. Take advantage of the Annual Accounting Scheme
The main advantages are that you do not receive expensive VAT bills when it is not convenient because your payments are spread throughout the year. This aids your cash planning; less time is spent filling out VAT returns as you only have to fill our one return a year as opposed to the usual four.
VAT registered businesses benefit from this scheme as it enables them to pay VAT in nine monthly installments and then pay a balancing payment, every year. It saves money and time.
5. Cash Accounting schemes
You are eligible for the cash accounting scheme whereby you only pay VAT on invoices, if your annual turnover is less than £660, 000. The time your turnover reaches £825,000, you will not be able to use this scheme. The main advantage of using this cash accounting scheme is that it helps cash flow, especially if you have customers who pay late. It also benefits to save money and time for your business.
6. Don’t make unnecessary demands
Demanding VAT on the purchase of business entertainment or non-business expenses and vehicles is not allowed. And if you do it, you may be awarded a penalty and interest. It benefits time.
7. Ask for a VAT invoice
Always ask for a VAT invoice as this can be used to claim it back when buying.
8. Demand back VAT rapidly
Try to claim all expenses before long as this will help to ease your cash flow.
9. Flat rate scheme
You can calculate your VAT payment as a flat rate percentage of your turnover by using this scheme. The calculation of percentage depends on in which sector you trade in. You are not able to reclaim the paid VAT By using this scheme. Moreover it has been added to the flat rate percentage. As you don’t require accounting for the VAT charged on every sale and purchase, the flat rate scheme saves you money and time.
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