4 VAT Tips

VAT tips

Businesses are responsible for collecting and remitting VAT to HMRC. They charge VAT on their sales, and they can also claim back the VAT they’ve paid on their purchases. This means that the tax is ultimately paid by the end consumer.

Handling VAT can be a bit of a puzzle. In this article, we’ll walk you through four crucial tips designed to not only meet your VAT obligations but also make the most of your finances.

At Joanna Bookkeeping, we understand the importance of VAT and the role it plays in business. We’re committed to helping business owners like you navigate every step of the process, ensuring a smooth journey from day one and beyond. Book a free consultation with our Oxford accountant and discover how we’re helping ambitious SMEs all over the UK maximise their potential by providing effective accounting and bookkeeping services.

Let’s take a look at 4 VAT tips that every business owner should be aware of…

VAT Tip 1: Set Up Direct Debit for Effortless Payments

Tackling VAT manually can be a hassle, especially amidst a sea of other responsibilities. Here’s a pro tip: opt for Direct Debit as your payment method. This way, you won’t risk overlooking any payments, and potential fines.

VAT Tip 2: Opt for the VAT Cash Accounting Scheme for Better Cash Flow Management

There’s more than one VAT accounting scheme available in the UK. Is the timing of your payments causing cash flow hiccups? If clients tend to settle invoices well after they’re raised, consider the VAT Cash Accounting Scheme. It lets you pay VAT to HMRC upon receiving payment and not when the invoice is raised, easing the strain on your cash flow. It’s a game-changer for businesses with delayed payment cycles.

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VAT Tip 3: Unlocking VAT Reclaims on Pre-Registration Costs

Wondering if you can claim VAT on costs incurred before you registered? The answer is yes, with a few conditions depending on whether it’s a service or a product. For a detailed breakdown, check out our article on VAT on pre-registration costs.

VAT Tip 4: Avoid the VAT Annual Accounting Scheme if You're in a Refund Position

While the VAT Annual Accounting Scheme offers some convenience, it might not be the best fit for everyone. If you’re typically in a position to claim refunds from HMRC, this scheme might not align with your financial strategy. It’s designed for businesses that don’t regularly seek refunds because a refund is made only once a year.

Remember, VAT management is a crucial aspect of your business, and these tips are tailored to help you navigate it smoothly. Incorporating them into your strategy can lead to more streamlined operations and a healthier bottom line.

Joanna Bookkeeping is dedicated to assisting businesses in understanding and leveraging these VAT insights. As partners in your business journey, we aim to ensure you have the tools and understanding to guide your business toward success.

Book a call with Joanna Bookkeeping for comprehensive support, tailored insights, and strategies built on experience. Get in touch with our dedicated Oxford accounting team and let’s drive your business with confidence.

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