VAT Tips
- Be sure to get your VAT return and payment in on time otherwise you may end up paying interest
and penalties.
- If you sell mainly to businesses it may be advantageous to register for VAT even your turnover
is lower than the registration threshold (£70,000).
- The first VAT return can be used to reclaim VAT paid on stock held at the date of
registration, capital items (such as computers or furniture) purchased before registration and consumables in the six months
prior to registration.
- If your turnover is below £150,000 you may be able to register for the flat rate vat scheme
which means that you do not have to calculate VAT on each individual sales and purchase invoice.
- Business now qualify for automatic bad debt relief on debts older than 6 months without the
need to write to the debtor company.
- If your turnover is below £1,350,000 you may qualify for the annual and cash accounting
schemes.
- Vat can only be reclaimed on vehicles if there are no windows or seats in the rear.
- It is only worth reclaiming VAT on motor fuel if there is fairly high mileage, otherwise the
scale charges may be higher than the vat reclaimed.
- If staff use their own cars and are paid on a pence per mile basis, VAT can be reclaimed at
rates agreed by the VAT office (typically about 12p per mile depended on engine size).
- VAT can be reclaimed on maintenance and servicing costs for any private cars used on a pence per mile
basis.
- VAT can be reclaimed on gifts of up to £15 per recipient per year.
- Staff parties are eligible for VAT relief in full as long as only staff are invited, otherwise
the vat reclaim should be made pro-rata.
- If you are too busy we offer a bookkeeping and VAT preparation service.
