Quartely VAT Returns £150.00
You must register for VAT with HM Revenue and Customs (HMRC) if your business’ VAT taxable turnover is more than £82,000. You can register voluntarily if it’s below this, unless everything you sell is exempt.
You can only charge VAT if your business is registered for VAT.
VAT is charged on things like:
- Business sales - eg when you sell goods and services
- Hiring or loaning goods to someone
- Selling business assets
- Items sold to staff - eg canteen meals
- Business goods used for personal reasons
- ‘Non-sales’ like bartering, part-exchange and gifts
These are known as ‘taxable supplies’. There are different rules for imports and exports and charities. There are 3 different rates of VAT and you must make sure you charge the right amount. The thresholds for registering for VAT or joining a VAT accounting scheme from 1 April 2015.
The thresholds for registering for VAT or joining a VAT accounting scheme from 1 April 2015.
|Registration for distance selling* into the UK||£70.00|
|Registration for bringing goods into the UK from the EU**||£82.00|
|Completing simplified EC Sales List ***||£106,500 or less and supplies to EU countries
of £11,000 or less
* Distance selling occurs when a VAT-registered business in one EU country supplies and delivers goods to a customer in another EU country who isn’t registered for VAT. You are distance selling into the UK if:
- You’re outside the UK but in another EU country
- You sell goods to customers in the UK or Isle of Man who aren’t VAT-registered
- You deliver the goods or arrange for their delivery
** When moving goods from European Union (EU) countries, you need to get a commodity code and pay VAT, but not import duty.
*** VAT registered businesses in the UK who make supplies of goods and services to a customer who is registered for VAT elsewhere in the EU must report them to HMRC.
You submit the details on what is known as an EC Sales List (ESL), this contains details of:
- Your customers
- The relevant country code
- The value of the goods or services
- Must charge VAT on their goods or services
- May reclaim any VAT they’ve paid on business-related goods or services
If you’re a VAT-registered business you must report to HM Revenue and Customs (HMRC) the amount of VAT you’ve charged and the amount of VAT you’ve paid. This is done through your VAT Return which is usually due every 3 months. There are 3 different rates of VAT and you must make sure you charge the right amount.
VAT rates for goods and services
|Rate||% of VAT||What the rate applies to|
|Standard||20%||Most goods and services|
|Reduced rate||5%||Some goods and services, eg children’s
car seats and home energy
|Zero rate||0%||Zero-rated goods and services,
eg most food and children’s clothes
VAT Cancelation/Vat Deregistration £38.00
You must cancel your registration if you’re no longer eligible to be VAT registered. For example:
- You stop trading or making VAT taxable supplies
- You join a VAT group
You can ask HM Revenue and Customs (HMRC) to cancel your registration if your VAT taxable turnover falls below the de-registration threshold of £80,000. You must do this within 30 days of your reason for cancelling the registration or you may be charged a penalty.
It usually takes 3 weeks for HMRC to confirm your de-registration and the official de-registration date. This is either the date when the reason for your cancellation took effect (e.g. when you stopped trading), or the date you asked to de-register if it’s voluntary.
There are several VAT schemes so it’s important to do your research and ensure that you apply the right one for your business, since the alternatives relate to specific trade sectors and turnover. Some of these VAT accounting schemes have been designed for specific trade sectors. Others have been designed to deal with more general business issues. Some of the schemes can be used together.
These schemes are:
- Annual Accounting Scheme
- Cash Accounting Scheme
- Flat Rate Scheme
- VAT schemes for retailers
- Margin schemes for second-hand goods, art, antiques, collectibles
- Tour Operators' Margin Scheme
|VAT accounting scheme||Threshold to join scheme||Threshold to leave scheme|
|Flat Rate Scheme||£150,000 or less||More than £230,000|
|Cash Accounting Scheme||£1.35 million or less||More than £1.6 million|
|Annual Accounting Scheme||£1.35 million or less||More than £1.6 million|