VAT Returns & Services

MTD-compliant VAT Returns & Services

With the right advice and a bit of careful planning, you can not only make sure your VAT returns are submitted like clockwork, but your business can enjoy other benefits too. At THP, we can help you decide whether to register your business for VAT, offer you helpful VAT advice, and can complete and submit accurate VAT returns on time, every time. Better still, now that all VAT registered businesses have to be part of Making Tax Digital, we can provide you with the cloud accounting software you need – often at no extra cost. 

VAT Registration

We’re often asked whether a business has to register for VAT.

At the simplest level, if your VAT taxable turnover is £90,000 or more, then you have to!

If your turnover is less than that, you can register voluntarily. It sounds odd to register for a tax if you don’t need to, but there are two good reasons you might do this:

• You could save money. If you pay out more VAT than you charge, the taxman actually pays you!
• Your business has more credibility. Larger clients and customers will often only deal with VAT-registered businesses.

Every business is different, so VAT registration isn’t for everyone. Our expert VAT accountants are happy to advise on the best route for you.

What is Making Tax Digital for VAT?

Since April 2022, all VAT-registered businesses have had to comply with Making Tax Digital for VAT.

There are very few exemptions. Only those businesses that can’t reasonably use computers or the internet are able to submit paper returns. This might be the case because of age, disability, religious belief or because the business is run from a very remote location.

All other VAT-registered businesses now have to keep digital financial records and submit their VAT returns electronically.

How do I submit MTD-compliant VAT returns?

The simplest and best way to submit MTD-compliant VAT returns is by using approved cloud accounting software. We recommend the following platforms:

• FreeAgent: for small businesses and sole traders
• Xero: for larger businesses

Once you are a THP client, we can provide you with access to FreeAgent software at no extra cost to you.

How do I register for Making Tax Digital for VAT?

You need to have compatible software before you register for Making Tax Digital for VAT.

You can then either ask THP to register your business on your behalf. Alternatively, you can sign up yourself.

What happens if I don’t comply with MTD for VAT?

If you don’t comply with MTD for VAT, you face expensive penalties. For example, if you do not keep your records digitally, you can be fined between £5 and £15 for every day you fail to do so. If you do not file your return using compliant software, you can be fined £400 each time.

Where can I find out more about Making Tax Digital?

If you’d like to learn more about MTD, take a look at our guide, What is Making Tax Digital?

Help with MTD for VAT

Even though cloud accounting software makes submitting VAT returns simpler, it’s crucial that you avoid making mistakes.

Why? If you file an incorrect return you face a penalty of 100% of any underpaid VAT – so it’s important to have a good accountant to check your returns first!

When you ask THP to take care of your VAT returns, we submit them quickly and accurately after making sure you’re not paying more tax than you need.

It’s also worth knowing that, if you use our bookkeeping service, you’ll keep costs down further – we won’t have to spend time ironing out errors before submitting your VAT return.

VAT Planning

Specialist VAT planning can reduce your risk of paying too much tax – and can also aid your cash flow.

THP’s specialist VAT accountants can work with you to ensure that your business:

• Claims back the full amount of VAT you are entitled to
• Pays out only the correct amount of VAT to HMRC
• Improves cash flow by claiming back VAT as soon as possible, and paying it as late as you are allowed.

We can also advise you on the full range of special VAT schemes that may result additional benefits for your business. These include:

• VAT cash accounting – VAT on payments made and received rather than invoices issued and received.
• VAT annual accounting – making a single VAT return each year, rather than four.
• A VAT flat rate scheme – VAT calculated as a percentage applied to your turnover, rather than charged on each individual sale or purchase.

Each of these schemes, along with other strategies that may result in a VAT saving, have benefits and potential drawbacks – so to make sure you’re enjoying the best VAT planning for your business, contact us today.