VAT for Business
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VAT Flat Rate Scheme
VAT for a business which has an annual turnover which is below £150,000 p.a. excluding VAT, the VAT flat rate scheme is a suitable option. The scheme allows businesses to pay a flat rate of VAT which is a percentage calculated by the average sales of that particular trade sector.
Customers pay the normal VAT rate but the VAT payable is worked out using the total sales figures including VAT. There is a 1% reduction of VAT for businesses within their first year of VAT registration.
Annual VAT Accounting Scheme
Businesses which are on the annual VAT accounting scheme pay in nine monthly or quarterly instalments with the balance payable or received at the end of the tax year, once the VAT return has been submitted. The amount payable is based upon an annual estimate from the previous year. For business who have been trading for less than a year, the amounts are calculated using an estimate of your VAT liability.
The hassle of VAT for businesses that use this scheme can be reduced as only one VAT return needs to be submitted at the end of the year. Any outstanding VAT for businesses needs to be paid the HMRC at the end of the year and the same applies to VAT refunds.
VAT Cash Accounting Scheme
VAT for businesses who have a sales turnover of under £1.3m, excluding VAT, can be paid using the VAT cash accounting scheme. Instead of paying VAT when an invoice has been issued, VAT for businesses who are on the cash accounting scheme only need to pay VAT after the customer has paid you. This is ideal when customers do not pay on time and if your business is suffering from a high volume of debt. If the customer never does pay you, then you are not liable to pay VAT at all.
VAT Retail Schemes
VAT for retail businesses can be simplified using a number of different schemes. These include apportionment schemes, the direct calculation scheme and the point of sale scheme. It is also possible to arrange a bespoke scheme with the HMRC to pay VAT for your business if your turnover is above a certain threshold.
There are also special arrangements of VAT for business payments if your company a catering business, a chemist or florist. |
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Author Resource:-
VAT for business can be a complex and time consuming issue which is why we are here to provide you with the help that you need to keep on time of your finances.
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By :
Gareth Hoyle
Submitted
2011-04-20 04:13:53 |
Article From Article Mayhem
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