We know that VAT isn’t the most exciting thing in the world to talk about, but it’s important to get organised with it, whatever the size of your business.
Our VAT expert Alex Millar has put his top tips together as a guideline for you:
• It may be appropriate to consider voluntary VAT registration if most of your sales are going to be or are made to VAT registered customers.
• If most of your sales are made to customers who are not registered for VAT you might want to consider deregistering for VAT, if your turnover allows.
• If your turnover is currently at a level where VAT registration is compulsory it may be appropriate to consider if you are in the VAT trap and what you can do to get out of it. The VAT trap is a band of turnover above the VAT registration where turnover has a negative impact on business profits. The VAT trap varies depending on the nature of the business, its customers, and the costs it incurs.
• The flat rate scheme can result in VAT savings for some small businesses but can be costly if the VAT registered person also has exempt income, for example, income from letting residential property.
• If the flat rate scheme is not used, the de minimis rules can sometimes provide an opportunity to fully recover VAT that would otherwise be irrecoverable, for example, VAT on repairs to let residential property.
• It may be appropriate to consider the cash accounting scheme if you have some slow-paying customers.
For more information or for help specific to your individual requirements, contact Alex on 01904 464166 firstname.lastname@example.org
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