VAT Returns Demo
What is Value Added Tax (VAT)?
A value-added tax (VAT) is collected on a product at every stage of its production during which value is added to it, from its initial production to the point of sale. The amount of VAT that the user pays is based on the cost of the product, less any costs of materials used in the product that have already been taxed at a previous stage. VAT is an indirect tax that rises in direct proportion to the rate of consumption. It’s an incremental tax placed on every product and service at each stage of its life cycle, from manufacturing to distribution to sale. It can be filed monthly or on a quarterly basis.
Rate of VAT in the UK
You must pay Value Added Tax on every purchase of products or services, whether you are a person or a company. In the United Kingdom three types of VAT rates are charged as follows:
VAT Schemes
Scheme 1 – Standard VAT Accounting
- Standard VAT is 20% which means that you claim VAT on purchases made
- VAT returns are submitted quarterly
- This is completed online and must show output and input tax for that quarter
- You can reclaim VAT for invoices raised in that quarter
Scheme 2 – Flat Rate VAT Scheme
- Provided as an incentive to simplify taxes allowing you to charge VAT on invoices at 20% but only pay HMRC at a lower rate
- For example, IT Contractors have a FLAT rate of 13.5% in their 1st year of trading and 14.5% after this
- This ensures that extra income is raised by contractors
- Certain thresholds exist and your accountant will aid you with staying within these boundaries
Scheme 3 – Cash Accounting Scheme
- If your turnover is more than £1.35 million you CANNOT use this scheme
- This scheme is advantages for businesses that pay VAT only when clients have paid for goods/services
- However, VAT cannot be claimed for goods bought for the company if they have not yet been paid for
- This is completed online and must show output and input tax for that quarter
- Remember that VAT cannot be paid for purchases/services that have not been paid for
Why Use an Accountant to Do Your VAT Returns?
VAT is not a conventional tax. It is quite complex in nature because it varies from product to product and service to service from 0% to 20%.
VAT accountants spend time working to ensure your company pays the right amount of VAT to HMRC, as well as to ensure that all VAT registration procedures have been met for the best VAT scheme for your business. They will need access to your business records to ensure that the proper VAT taxes are being collected at the required rate for reporting to HMRC.
VAT accountants can also offer crucial advice throughout the tax year and help answer all your questions to reduce time and frustration when working with the complex procedures associated with VAT. This kind of help from a VAT team is necessary due to the sheer number of goods and services that correspond to VAT.
Additionally, with the passing of the “Making Tax Digital” Act (MTD) in 2019, VAT returns are now required to be calculated and submitted digitally and a company will not be able to submit its returns by completing them on HMRC online services. VAT returns must be submitted using MTD functional compatible software.
There are three types of limited companies in Uk for which you can get yourself registered:
Lanop: A One Stop Shop for All Your VAT Accounting Needs
Our team of highly qualified experts do year-round VAT reporting and prepare returns on your behalf. We will submit it online using MTD compliant software. Our accounting software, tax experts and a dedicated client manager is exactly what you need to stay compliant with HMRC’s Making Tax Digital regulations.
Once you have chosen the right VAT scheme, we will guide you through the registration process in real time and advise on how to switch if you plan to move to a more tax-efficient scheme.
Lanop Accountants eliminates the need to search for an all-encompassing accountancy firm. Our corporate headquarters in Putney, London provide practical and efficient solutions to all your accounting needs.
Our skilled tax and finance professionals work diligently to make your life simpler by reducing financial stress and making business models more lucrative and efficient in accordance with up-to-date regulations.
Kai Schiefelbein
I am the Managing Director at Lanop. I have been advising clients Read More
Kai Schiefelbein
Managing Director
I provide my expertise and services to a diverse range of clients involved in the information technology (IT) sector, assisting them in resolving industry-specific accounting and tax issues. With the help of my extensive experience and understanding of this industry, I provide attention to detail advice that is completely specialized to your business structure needs, allowing you to worry less about your daily accounting services and focus more on earning profits.
Rehmat Hussain
I am the Global Manager for VAT at Lanop. My team handles VAT Read More
Rehmat Hussain
VAT Manager
I am the Global Manager for VAT Returns at Lanop with more than 5 years of experience in accounting, tax, and finance. I am responsible for providing services to help sole traders with self-assessments, tax planning and other relevant accounting services. My realistic approach, extensive experience, and successful track record makes me your business’s best friend.
Client's Testimonial
I have been with Lanop since 2016. I came in looking for an accountant and tax adviser and ended up making friends. It has been an amazing professional journey for me. I run a business consultancy and rely heavily on Lanop’s expertise to service my clients’ needs. Over the years they have sorted out my personal and company taxes. They are always available to discuss issues and are reassuring, practical and supportive of my business Zaib and his team are extremely helpful & generous with both their knowledge and time. The have provided me an excellent friendly service with brilliant advice, prompt replies.
Hasan Turunc
Senior Advisor
Koç Holding A.Ş.
Why should you choose us?
Digitalized Solutions
E-Commerce VAT Support
In-House VAT Consultants
Professional & Client Centric
Flexible Approach
No Surprise Costs
