Registering a UK company for VAT

In the UK, a company is required to register for VAT as soon as it becomes apparent that the turnover in the coming 12 months will exceed £81k (tax year 2014/15). In order to register the company, a VAT 100 form needs to be completed which can either be done through your accountant or filed online through the HMRC website.

Do you qualify for the flat rate scheme?

A simple and sometimes cash efficient option of accounting for VAT is to utilise the flat rate scheme. Rather than accounting for both output and input tax, this scheme allows companies with turnover of less than £150k per annum to apply a flat rate percentage to all of its sales at a rate dictated by the sector in which it operates.

Again this is an easy scheme to enter and your accountant should be well placed to advise on how this could apply to your company.

What is the cash accounting scheme for VAT?

This system allows registered businesses with turnover less than £1.35m per annum to account for input and output tax on a payments and receipts basis rather than on the traditional invoice basis.

This is an advantage to businesses who have debtors in excess of creditors meaning that the VAT on debtors is not due until your customers have settled the outstanding invoices.

Your next step…

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