Paying a Value Added Tax (VAT) liability is usually a significant burden for smaller businesses. This article is aimed at owners of little firms within the UK and focuses upon how their VAT burden can be successfully managed.

Ten recommendations on managing your VAT liability:

If you don't need to have to compulsory register for VAT, calculate if it could be worthwhile to de-register for VAT.
If you're not registered make sure that you overview your requirement to register on a month-to-month basis, as you can find economic penalties for late registration.

Make certain that you are calculating your VAT liability properly. Several business pay VAT on products they should not and don't reclaim all of the VAT that they're entitled to.

Retain up to date with VAT legislation adjustments that impact your business. It might be worth considering retaining an accountant to help keep an eye on this for you personally.

File all VAT returns on time and be sure that VAT payments are produced before deadlines. There are economic penalties for not meeting VAT deadlines.

In case you are experiencing cash flow troubles and can not make your VAT payment on time, then make contact with HMRC to negotiate payment terms.

Calculate if employing the flat price VAT scheme would save you income. This can be for firms using a turnover under £150,000. It saves administration and may be financially valuable.
Take into consideration in case you would benefit from money accounting for VAT purposes. In case your taxable turnover is under £1,350,000 a year this process makes it possible for you to account for VAT on the basis of money received and paid, rather than the invoice date or time of supply.

Would you advantage from applying the annual accounting strategy. If your turnover is beneath £1,350,000 beneath this scheme you make only a single VAT return per year.

Really should you be making use of a retail scheme. These schemes are for retailers and they may be an option if it is not practical to problem invoices for a massive number of supplies direct for the public.
VAT is actually a complex and specialist region of taxation for anyone who is in any doubt over how it applies to you or your business then it truly is advised that you simply make contact with an accountant or VAT specialist with knowledge in this location. It is possible to also get in touch with HMRC direct for guidance.

This short article is an introduction to certain aspects of VAT legislation only and it can be not intended to be extensive.