VAT

Value Added Tax. VAT can be at 20%, 5%, 0%, and some things are exempt from VAT. Often described as a 'luxury tax' this is an oversimplification - there is VAT on a chocolate digestive but not on a Jaffa Cake, and you pay VAT on a bottle of water but not on a milkshake.

Businesses that have a sales turnover (so that is before we deduct any costs) of £90,000* over a 12 month period must register for VAT. Once registered for VAT they will need to submit a quarterly VAT return, and pay any VAT owed to HMRC - although this can also be a refund too, it largely depends on what you sell.

There are a number of schemes to simplify VAT, and these can also save you money, the flat rate scheme being the most common of these. We can advise you whether this might be advantageous, register as your agent for VAT and get your VAT returns submitted on time. Nobody really likes VAT but we might be the closest you will find, so contact us for a VAT chat that won't cost you a penny.

*The £90,000 threshold is correct at 1st April 2024 - the turnover calculations are over a 12 month rolling period so at the end of each month add in the previous 11 months' turnover and you will have your turnover for VAT registration purposes.