Quarterly VAT Return
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A VAT Return records your total sales and purchases. It is a usual process to submit your VAT Return to HMRC every 3 months and this period of VAT return is known as your ‘accounting period’. If you are a quarterly payee of your VAT Returns then the deadline for paying your VAT returns is generally one month and seven days after the VAT period ends. Your payments should reach HMRC within this period. If a company has a turnover of above the VAT limit in a rolling year they are legally required to become VAT registered. Some companies may wish to register for VAT under this threshold for different reasons. Some firms choose to register for VAT in order to appear larger than they are. Your clients will probably be aware of the threshold – and if you are not registered they will know that your turnover is lower than this. You may therefore consider registration as a way of increasing your standing amongst competitors, and in the eyes of clients. Reclaiming VAT – Although you will have to charge VAT on your goods and services once you are registered (known as output tax), you will also be able to reclaim VAT that you are charged by other businesses. This is known as input tax. As long as your input tax exceeds your output tax in a given period, you will be able to reclaim the difference from HMRC. Making Tax Digital Many VAT-registered businesses with a taxable turnover above the VAT threshold are now required to use the Making Tax Digital service to keep records digitally and use software to submit their VAT Returns. Thompson Accountancy Services are experienced in various software packages used to submit the VAT returns including Sage, Quickbooks, Xero, Clearbooks, Kashflow and bridging software.