Do you know when your business needs to register for VAT? It may seem obvious, but many business owners find they have hit the VAT threshold without even realising it, leaving them with a hefty VAT bill that they can’t recoup from their customers. ,
A business must register for VAT when it is expected to hit a VAT turnover over £85,000.00 in the next 30 day period, or the business had a VAT taxable turnover of more than £85,000 over the last 12 months. If you are late in registering, you must pay what you owe when you should have registered.
There are other reasons you may need to register but it is best to speak to your bookkeeper or accountant to check you do not fall into one of these other categories.
So what changes once you register?
Say you are a business owner who has just reached the VAT threshold and must now submit VAT returns on a quarterly basis. You currently keep note of all of your sales and purchases in Excel, however due to how busy you are you often leave transactions unrecorded, figuring your accountant will deal with them at the financial year end. Now, you realise, these transactions must all be recorded and reported on a quarterly basis in order to complete your VAT return. What’s more, you are suddenly hit with a deluge of new terms (MTD anyone?) and rules you must follow. You also have to find a software program that is MTD compatible.
Furthermore, once you’ve chosen a new software program you then need to transfer your data off Excel and onto the new system. Then, you are hit with a whole new set of terms when trying to set it up – opening journals, trade debtors, trade creditors, the list goes on….
Rather than try and muddle your way through, now would be a good time to hire a bookkeeper, saving you time and allowing you to focus on the tasks you enjoy doing. Your bookkeeper will ensure your data is transferred seamlessly, your VAT returns are accurate and submitted on time and your paperwork is organised and filed correctly, should there ever be a VAT investigation by HMRC.
If you’d like to find out more about how Nine Ashes Bookkeeping can help your business with your bookkeeping needs, get in touch to arrange a free consultation. Based in Essex, we provide small businesses bespoke, affordable bookkeeping and payroll services.