A tax that is imposed on all the sales made in the UK by taxable people is called Value Added Tax. Every business that is registered with HMRC for VAT is required to make submissions to the Her Majesty’s Revenue and Customs on a quarterly basis. To avoid heavy penalties, you are required to file the return within the deadline that will be indicated on the VAT return form. The VAT is calculated by getting the net difference of output VAT at the standard rate of 20%. You can get your deadline information through your online VAT account too.
How to get your estimate VAT returns?
The VAT tax law in the UK allows you to file estimated returns to HMRC by providing a strong reason for submitting estimate input or output tax. The reasons you may provide could be a change of staff, getting third-party data after the expected time, or changing of the Accounting software. In this case, HMRC will allow you to make adjustments and to submit correct returns on the later dates.
Exemption and partial exemption VAT supplies
There are certain goods and services that are partially or wholly VAT exempt. If you deal in such products or services that are VAT exempts, you will not be able to be registered for VAT and resultant reclaiming VAT on your expenses or purchases for your business. VAT exempt goods and services include charitable fundraising events, education and training services, membership registration by any organization, finance, credit, and insurance-related services, and selling, letting, and leasing of any commercial land or building. There are certain zero-rated supplies too that also do not add any VAT to the selling prices. If your business is VAT registered and is obtaining VAT on all goods that are used to make exempt supplies, it will be classified as a partially exempt business.
What are partly exempt businesses?
If you are claiming VAT on the acquisition of VAT exempt supplies, your business will be categorized as partially exempt. In such a scenario, you might not be able to claim exempt input tax, but there are some ways too in which you can recover it lawfully. Buying VAT exempt goods and utilizing them for personal use will also not allow you to claim VAT. And if you are using some of them in your business and some for personal use, you will be able to claim VAT on supplied used for business only. In this regard, you are required to maintain the records separately of both VAT exempt items and taxable items to calculate the right amounts of what you owe to HMRC and what you can reclaim.
How to submit the HMRC VAT return form?
Modern tax laws of the UK require the submission of VAT return forms online and paying tax bills online.
Exemptions for submitting VAT online
If your business holds people form the religions that forbid the use of a computer, you are unable to use a computer due to age or any disability, or you are subject to insolvency, you can discuss the alternative mode of VAT return filing and payments.
Benefits of submitting your VAT returns online
The online submission of the VAT returns is the most secure way. You will be getting instant notification of submission. It keeps you alert of the coming deadlines. It provides additional time to plan your VAT returns and payments.
Conditions of Filing VAT online
If you want to make VAT submissions online, you will agree on the following conditions.
- By opting for online submissions, you will be getting notifications regarding deadlines, deregistration, and change in VAT registration details. You will also be able to request HMRC for VAT exemptions and VAT registration number transferal.
- You can use the online VAT return portal only if you hold a government gateway account. Otherwise, HMRC has the right to deny you to use the online facility.
- People that need Government registration numbers, notifying suppliers from other EU members or notifying the disposal of things whose VAT is reclaimed cannot use this facility.
What does a VAT return include?
A VAT return customarily contains the following;
- The Sum of VAT amount owed to HMRC
- Reclaimable Amount of VAT
- Total purchases and sales during the reported quarter
- The net payable or refundable amount
- Default surcharge of late submissions
How to claim bad debt relief?
If you have provided goods or services to any customer and are not yet paid, you are in bad debt. If you are fulfilling all the VAT requirements, you can claim bad debt relief from the HMRC. For claiming your debt:
- The VAT on debt supplies have must be paid to HMRC.
- You did not have shifted the debt
- You must not have charged above the expected price for the supply
Preparing for a VAT inspection
HMRC makes regular inspection visits to registered limited companies. There is nothing to be worried about if you are not engaged in any critical VAT fraud in your business. HMRC officials make visits in order to ensure that you are fulfilling all the responsibilities regarding VAT and are keeping your words. The inspection will not happen; surprisingly, you will be informed by your local HMRC office that your business has been chosen for VAT inspection.
After agreeing on a time and date, you will be receiving a letter from the HMRC office that will be stating the date and time of inspection and the name of the respective officer. This letter will also contain instructions about the documents and records that you are required to provide. The important documents in this regard are:
- Annual accounts
- All sales and purchase invoices
- VAT registration particulars and the certificate
- VAT account and related paperwork
- All accounting Records
- Bank statements
How can ProAccountax Facilitate You?
ProAccountax is a professional accounting firm and is facilitating a large number of businesses form an extensive period of time. Our accountants and Tax solicitors are experts in dealing with the VAT returns preparations, assisting in claiming bad debt reliefs, and help in preparation for HMRC’s VAT inspections. We keep our clients alert about every change in the procedures and deadlines of filing returns to prevent them from facing massive penalties and legal complications. You can get our accounting and taxation services at very affordable rates.