Do Businesses Need Help Calculating Their VAT? As a business owner, you should have a rough idea of what VAT is and how
your business should be using it. However, if you don't, there is no need to
worry! Our team have great knowledge of VAT taxes and how it should be applied
to each and every business. Just read our blog and find out.
Leonard
Fuller A.I.C.B have years of experience dealing with VAT for many
businesses across various industries. When you need help monitoring VAT tax, we
are the only place to go.
So, What Is VAT? VAT
stands for Value Added Tax , which is basically money added on to the
products that we buy and sell, although this does not apply to every product. There
are four categories when it comes to taxing products which are:
Standard Rate - Standard
rate is valued at 20%. This means whatever product you are selling will cost
20% more than the original price as this is the VAT. You should always assume this is
the rate to charge, unless your products falls into a different
category.
Zero Rate - This is
charged on certain products such as food (from stores), children's clothing,
books and several
other items . This means 0% VAT is charged and you may not have to register
for VAT. If you don't register for VAT, you do have to apply for VAT exemption -
nobody wants to pay taxes that they don't owe.
Reduced Rate -
Reduced rate is VAT that is only valued at 5% of the product. Reduced rate will
be used most commonly on fuel and power that you use.
Exempt Supplies - Services
that are exempt from VAT fall under industries such as education, finances, insurance
and some health care such as dentists and doctors. Just as zero rate, if these
are the only goods you offer, you do not have to register for VAT.
If you are the owner of your business, we would hope you
know which category you fall under, but are you calculating your taxes
correctly?
Use Computerised Accounting Systems Some say that
computerised accounting systems are the best thing since sliced bread and
we completely agree! Apart from saving you time and cutting out all the errors,
accounting systems will help to calculate your taxes without you having to lift
a finger.
It doesn't just help with your VAT taxes either. Whether you
want to manage payroll, invoices or your own expenses, computerised accounting
systems will always help. Once information has been input into the system, you
can easily monitor your finances through the computer and keep all your data in
one place or share among others.
When you need help setting up accounting systems, the Leonard Fuller
team can help you get the hang of things or monitor your finances off-site
whilst always keeping you up to date with every development.
When Does Your Business Need To Use VAT? As a trading company, you will constantly be dealing with customer
finances and payments that are being made to your suppliers for products. Unless
you are exempt from VAT you should always be calculating your taxes with every
payment made and received. This is actually a legal requirement and you could
be in big trouble if you fail to keep track of your VAT taxes.
A business has many responsibilities when it comes to
monitoring taxes and it is important to keep hold of this information for a
minimum of six years as well - just in
case the HMRC
come knocking . Business must charge VAT on all their goods and services. By
doing this, you may have the chance to reclaim some of the taxes that you have
paid, another task that Leonard Fuller A.I.C.B can help with.
Contact Us If you need assistance monitoring your VAT or just want a
little help understanding when to use it, Leonard Fuller A.I.C.B are always on
hand to help. Just get in touch with our team today on 01793 700637 07963 637748
