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VAT advice on registration and VAT rates

VAT is one of the most trying taxes for the ordinary businessman to manage.

We can remove the worry and stress by helping you to either manage the process inside our business or by taking over the entire process and preparing and submitting the Returns on your behalf.  We can even get you an extra 10 days credit with the HMRC by submitting Returns on-line.

If you have imports or exports, we can deal with Intrastat returns on your behalf, ensuring that you comply with all your obligations.

We can advise on the flat rate schemes and on annual accounting schemes that can give you a better cash flow, or even cut your liability.

Registration for VAT

Do you need to register for VAT?You are required to register for VAT when your turnover exceeds the registration limit in the past 12 months.  This is your responsibility as a businessperson, but we can help you if you let us know before you reach the limit.

You need to register one month after you hit the limit, and there will almost certainly be penalties for late registration.

Therefore, contact us in plenty of time to discuss registration is you believe you are close to the limit.  We cannot tell you what you must do if we don’t know!

The impact of VAT registration

Obviously, you have to increase your prices by 20% to include VAT, subject to certain exemptions, and whilst you will get VAT on purchases back, you will generally feel that you are out-of-pocket after registration.

You should use this as an opportunity to review your pricing ahead of registration to see if you can benefit yourself without needing to be registered. This is a simplified example of some real advice we gave to a client.

John is a joiner, and his accounts are very simple as he does regular maintenance work for 20 clients who each pay him £4,000. 

John has income of £80,000, and buys materials of £40,000 (£2,000 per contract) and has overheads of £10,000 giving him a profit of £30,000.  He thinks his turnover next year will be £92,000 from 23 clients and he will need to register for VAT.

John is busy all the time, and can barely keep up with the customer expectations, which indicates that they value his work and that a price increase won’t be unreasonable.

John increases his annual cost to £5,000 and loses 7 clients, who now think he is too pricy.John’s income is 16 x £5,000 = £80,000.  His costs are 16 x £2,000 = £32,000, and his overheads stay the same. 

His profit has increased to £38,000 for doing less work, and he doesn’t have to register for VAT.

Speak to us if you think you could benefit for the same simple advice.  This is what we do.

Fuel duty & BSOG claims

Fishermen and bus operators need to reclaim the fuel duty that they have suffered, or to claim duty rebates that they are entitled to.

We prepare these claims on a regular basis, and can help you maximise your refund and minimise the hassle by ensuring that claims are made in the correct format.

The table below shows the differing duty rates for the two main types of fuel.

Fuel typeFrom 1/10/10From 1/1/11From 23/3/11Current rate
Gas Oil (red diesel)11.1811.3311.1410.70
Unleaded petrol and diesel58.1958.9557.9557.95

VAT Calculator

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VAT rate,VAT included, VAT excluded

20%, 1/6, 5/6

17.5%, 7/47, 40/47

15%, 3/23,20/23

5%, 1/21,20/21

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