VAT can feel complicated, but once you understand the basics, it becomes much more manageable. This guide covers everything a small business owner in Gloucestershire needs to know.
Do you need to register for VAT?
You must register for VAT if your taxable turnover exceeds £90,000 in any 12-month period (as of 2024). You can also register voluntarily if your turnover is below this threshold - which can be beneficial if you have significant VAT on your purchases.
Making Tax Digital (MTD)
Since April 2022, all VAT-registered businesses must use MTD-compatible software to keep digital records and submit VAT returns. Xero is fully MTD-compliant and makes the process straightforward.
Common VAT schemes
The standard VAT scheme requires you to account for VAT on each invoice you issue and receive. The Flat Rate Scheme can simplify things for smaller businesses - you pay a fixed percentage of your turnover rather than calculating VAT on each transaction.
Common mistakes to avoid
Claiming VAT on non-business expenses, missing the filing deadline (you have one month and seven days after the end of each VAT period), and miscategorising exempt or zero-rated supplies are the most common errors we see.
When to get help
If you're unsure about any aspect of VAT, get professional advice. The cost of getting it wrong - penalties, interest, and the time spent correcting mistakes - far outweighs the cost of good bookkeeping.
Jenkins & Co. handles VAT returns for businesses across Gloucestershire. We ensure your returns are accurate, submitted on time, and that you're claiming everything you're entitled to.