All new business are now required to submit their quarterly VAT Returns on-line. Some small business with a turnover of less than £150,000 opt for the VAT rate scheme. This has the advantage of simplifying the record keeping and it only being necessary to pay over a percentage not turnovers. However, there are a number of pit-falls and before considering you should consider the alternatives carefully and this is where we can help you.
There are various VAT Schemes to small business submit their VAT Returns on-line, including the Cash Accounting Scheme, Annual Accounting Scheme, Retail Schemes and Flat Rate Schemes.
The Cash Accounting Scheme assists cash flow of a business by delaying the payment of output tax until money is received from a customer instead of the sales invoice date which is usually earlier.
The Annual Accounting Scheme requires only one VAT Return a year instead of four quarterly Returns.
Retails Schemes simplify accounting for retailers by avoiding the need to issue a Tax Invoice for every sale.
The Flat Rate Scheme is intended to produce administrative savings for a business with taxable sales of up to £150,000 and make it easier to account for VAT, but because of this simplicity of applying a simple percentage to turnover, depending on the type of business. However, there are pitfalls. No tax relief can obtained on the purchase of the capital goods, unless such expenditure, including VAT amounts to more than £2,000. The percentage has to be applied to exempt and zero rated income of the business, even though no output is charged to customers on such sales.
Howard Marks & Co can assist you in deciding the best scheme for you and helping you to submit your VAT Return on-line.
Tax Planning Advice
The most effective tax planning is simple. Complicated schemes are costly and frequently found to be ineffective.
To give clear tax planning advice it is necessary to understand the requirements of the individuals and, if applicable, his business but most of all the taxpayers must understand what is being done and why. Howard Marks & Co will, therefore find out from you whether you require tax planning advice and consider the most appropriate means of reducing your tax burden.
We are happy to give Tax planning Advice, even if we have not previously acted for you.