VAT

VatA business is either registered for VAT or it’s not.

If it is then the new Making Tax Digital for VAT rules will apply from April 2019.

If your business is VAT registered then it needs to add VAT to its sales invoices (with one or two exceptions) but it can reclaim the cost of VAT it pays to its suppliers. This is done on a VAT return.

Good bookkeeping is the key to keeping on top of VAT. The new Making Tax Digital for VAT rules only reinforce this view.

Set up a separate bank account for tax savings so you know the money is in the bank to pay the VAT (and corporation tax) when the time comes.

HMRC has several VAT schemes to help ease the burden of VAT on smaller businesses and both the Flat Rate scheme and cash accounting for VAT are worth looking in to.

Watch our short video about using accounting software and why it’s time to ditch the spreadsheets:

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