When your taxable income reaches the VAT threshold of £85,000, you are required by law to file a VAT return.
From this day forward, your accounting can get more complex, as your business is required to charge and pay across VAT on all your products and services. The way your business invoices for work carried out needs to change, and it can also affect your pricing.
Once your business is VAT registered, there is a requirement for filing a VAT return each quarter. Due to the timeliness required in meeting these deadlines, it becomes essential to keep up-to-date records.
Small business accounting software will be able to quickly calculate your quarterly VAT and get everything in the right place for filing the VAT Return.
It is also possible for your business to claim VAT relief on expenses, in a similar way to claiming tax relief. This helps to keep your VAT liability to a minimum.
At AJN Accountants we work hard to ensure that your business pays the least VAT possible and adheres to all necessary deadlines.
A VAT registered business:
- Must charge VAT on all products and services
- Can claim back VAT on some expenses
- Is responsible to file a VAT return every quarter, by the deadline
- Needs to pay across the VAT balance every quarter, by the deadline