VAT is a tax added to transactions between a supplier and a customer. There are various different rates of VAT chargeable depending on the type of transaction:
- 20% Main Rate VAT – applies to the majority of transactions e.g. clothing, hospitality
- 5% Reduced Rate VAT – e.g. children’s car seats, home energy
- 0% Zero Rate VAT – e.g. foods, children’s clothes
- Exempt – e.g. insurance, postage
- Outside the scope – e.g. charity donations, most overseas transactions
As a business, if sales exceed the VAT threshold of £85,000 then you must register to submit VAT returns.
Most VAT returns are submitted on a quarterly basis and the deadline for the return is 7th of the month following the month after the period end date for example a 30 June quarter end will be due by 7 August.
There are significant penalties for late filing of VAT returns or payment of VAT liabilities.
Most VAT returns must now be submitted digitally using approved software to be compliant with the Governments Making Tax Digital legislation, unless exempt under specific circumstances.
We have a specialist team who can assist with registering your business and can deal with all necessary submissions to help relieve some of the pressure so you can focus on other aspects of your business.