VAT – Getting Started

VAT – Getting Started

VAT is an often misunderstood tax and clients often ask questions about it. Hopefully this post will dispel some of the myths and make clear how it works. What is VAT? VAT is Value Added Tax. It is a tax that’s charged on most goods and services that registered businesses provide in the UK. For the purposes of this post we won’t explore the complexities when trading outside of the UK but we are happy to advise on this if you use the Contact Us link. Who charges VAT? VAT can only be charged by a registered business. A registered business is an individual, a partnership, a company, club, association or charity. If your turnover is below the threshold then you do not have to register but you can voluntarily decide to register if it is to the benefit of your business. Once your turnover is over the threshold (currently £85,000 per year) you must register. How much is VAT? There are three rates: standard – 20% reduced – 5% zero – 0% Goods and services charged at a standard, reduced or zero rate are ‘taxable supplies’. Even though a zero rated item doesn’t have VAT charged on it it is still a taxable supply at a rate of zero. Most goods are standard rates. The reduced rate applies to children’s car seats, domestic supplies of fuel and power and products to help with quitting smoking. A zero rate is applied to most basic food items, books and magazines, children’s clothing and shoes, and travel by public transport. Rates on different goods and services – GOV.UK – via www.hmrc.gov.uk...
Another year over…

Another year over…

Well all of a sudden we are in March and the tax year is almost over! That means that people like me will be nagging people like you for your paperwork and books for the tax year so that we can finalise your accounts and/or self assessment return. The tax year finishes on 5th April 2018 and from that point self assesssment returns can be submitted at any time through to the deadline on 31st January 2019. That seems like a very long time but those weeks and months will soon fly by. If you don’t know how much tax you need to pay by the deadline you could be very unpleasantly surprised by a large tax bill.     The easiest way to avoid this scenario is to get your paperwork and records to your bookkeeper or accountant as soon after the year end as possible. They can then produce your self assessment tax return and you will know, many months in advance, how much tax you have to pay (or are having refunded if applicable). Get your paperwork together while it’s fresh in your mind and it will take a huge weight off your mind when you hand it all over to a professional to deal with! Share this:Click to share on Twitter (Opens in new window)Click to share on Google+ (Opens in new window)Share on Skype (Opens in new window)Click to share on WhatsApp (Opens in new window)Click to email this to a friend (Opens in new window)Click to share on Pinterest (Opens in new window)Click to share on Pocket (Opens in new window)Click to share...
Making Tax Digital (MTD)

Making Tax Digital (MTD)

Making Tax Digital (or MTD) is a government initiative first announced in 2015 and is designed to simplify the way businesses report their financials to HMRC. Summary No more self assessment tax returns Records must be kept digitally Real time tax position available online Quarterly summary report  Must be submitted through accounting software Sole traders, partnerships and landlords with a turnover above the VAT threshold (£85,000) will be the first to join the scheme   When? Originally meant to roll out in April 2018 the government have extended the timescale so that quarterly filing won’t start until after 2020 and only VAT registered businesses will have to keep digital records from April 2019. Who? Currently only covering sole traders and partnerships, it is expected in time to cover limited companies too. Sole trader or partnership income must be in excess of £10,000 per year. This means it affects hundreds of thousands of small businesses. How? A summary report will need to be submitted from your accounting software each quarter. It will give a breakdown of your income and expenditure by category e.g. travel, advertising etc. Reports can be made more often than quarterly if you wish. Following the year end date an End of Year declaration will be made within 9 months from the year end. VAT registered businesses can combine their VAT and summary figures in one submission. Further Reading HMRC’s Overview of MTD (Making Tax Digital)GOV.UK Consultations around MTD (Making Tax Digital)ICAEW MTDXero MTDQuickBooks MTD Share this:Click to share on Twitter (Opens in new window)Click to share on Google+ (Opens in new window)Share on Skype (Opens in...
Client Spotlight – Weave & Wood Interiors

Client Spotlight – Weave & Wood Interiors

We are lucky to work with such a lovely set of clients and have occasionally thought it could help them with their businesses for us to highlight them to our other clients and blog readers. We are therefore going to be creating a client spotlight post on a regular basis to introduce you to our client base. I met earlier this week with Claire Wakely, who runs Weave & Wood Interiors in Ilminster.   Claire has been in the soft furnishings and interiors field for many years. Just a few years ago she decided to open up a retail outlet to showcase her skills and talents, along with the beautiful fabrics and many other products that she can supply. Having made a great success of this she now has a larger showroom and is an official stockist of Little Greene paint and paper. These beautiful products are luxurious and long lasting and will help make your home a unique and beautiful place to be. Click here for Little Greene’s website. Claire’s services include custom made to measure curtains, roller blinds, pelmets and cushions. These are bespoke products, made to your specification with fabric chosen from her huge selection of sample books. My own mother has had her living and dining room curtains made and hung by Claire and is delighted with the product and service she received. There is surely no better recommendation than a whole host of satisfied and repeat customers. Weave & Wood stock Romo fabrics and these are my personal favourite. Click here for Romo’s website. Claire’s showroom in Silver Street, Ilminster, is a treasure trove...

Setting up Self Employed

Becoming self employed is a dream for many people but there are a few things you need to know before you embark on the exciting journey of being your own boss. Business Structure You may need to think about the business structure that you need. Thousands of people begin as sole traders and this does suit most start-up businesses but it may be worth asking advice from a trusted business advisor to make sure that this is the best structure for your business. If you are going into business with one or more other people you can set up a partnership or a limited liability company, both of which come with pros and cons of their own. Regardless of the of business structure you choose you will need to register yourself as being in business. It may be as simple as filling in an online form with HMRC or could be slightly more complex depending on your requirements. If you are in any doubt at all you need to speak to someone who can impartially advise you about the process. Legal Responsibilities You must check if there are legal requirements for your type of business. Do you need a licence or a permit or some type of insurance? Being self employed is not just a case of beginning trading! Where Where will you work? Can you run your business from home or do you need an office or storage space? If you’re to be manufacturing goods do you need a factory or processing plant? If you rent or buy a business property you will need to register for and...