Bookkeeping and VAT
Our regular bookkeeping service relieves you from the burden of
organising and writing up your books and records, when your time is better
spent on the more practical aspects of your business. You simply drop off
your business records (bank statements, cheque books, invoices and receipts)
every month or every quarter, and we quickly process them. We can then use
the information for a variety of purposes, such as completing your VAT
return, preparing management accounts, or just keeping your end-of-year
accountancy bill down.
If you would like to have your bookkeeping
carried out more frequently and on your own premises in the Brighton and Hove area, but
are concerned about the responsibilities of taking on an employee or finding
someone reliable, we can recommend a freelance bookkeeper to you. We only
recommend people that we have known for years, and can vouch for their
competence and reliability.
We are a member of the Sage Accountants Club, which means we
have the knowledge and experience to help you choose and use Sage accounting
software.
For an online bookkeeping solution, we recommend
Kashflow, and we welcome enquiries from
businesses already using this system.
Frequently asked questions about VAT
Do I have to register for VAT?
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The most common case is where your turnover exceeds £67,000 in any period of 12 months
or less. Turnover for this purpose includes standard-rated and zero-rated sales (unless your
sales are all or mostly zero-rated), but not exempt sales or sales of capital items. You then
have one month to register, and there are penalties for late registration.
More information on
VAT registration.
I am selling a car used in my business - do I have to charge VAT?
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Generally, the rule is that you don’t need to charge VAT. However, where exceptionally you
reclaimed VAT when you bought the car, or you sold the car for a profit, then you will need
to charge some VAT. In which case, ask us for further details.
I am making a sale overseas - what VAT do I charge?
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If you are selling goods to a country outside the EU (Switzerland and the Channel Islands are
outside the EU), you do not need to charge UK VAT.
If you are selling goods to another business outside the UK but in the EU (including the
Republic of Ireland), you do not need to charge UK VAT if you have obtained your customer’s
overseas VAT number. Otherwise, you should charge VAT at 17.5% if your
goods would be standard-rated for
UK VAT
purposes.
If you are providing a service, the position is a lot more complex. Ask us for further details.
My customer reimburses some of my expenses if I include them on my invoice - should I
charge VAT on them?
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In most cases these are expenses you have incurred in order to provide your service, such as
train fares, accommodation and subsistence, or telephone/stationery costs. These are treated
as part of your service, and should have VAT added. It does not matter that you have not
made a profit on the expenses.
In some cases however you may merely pay for something as an agent for your customer,
which your customer is then free to use for his own purposes. These items need not have
VAT added, in which case they should be itemised and shown separately on your invoice.
I have discovered an error on a previous VAT return - what should I do?
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If the error was for under £2,000, you can correct it by including an adjustment on your next
VAT return.
If the error was for over £2,000, you need to complete a separate form
VAT 652
and send it to Customs.
After 1 July 2008, the limit becomes £10,000 or 1% of the turnover on the
return, whichever is greater, but subject to an overall ceiling of £50,000.
When does the VAT have to be paid, and what happens if I am late?
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VAT is normally payable by the end of the month following your VAT return period, which
is usually quarterly. However, if you pay electronically, you are allowed an extra 7 days to
pay. If you take advantage of this, the same concession applies to sending in the
paper VAT return form.
In less common cases, VAT may be accounted for monthly or annually. If your payment is late
more than once per year, you may have to pay a penalty ranging from 2% to 15% of the VAT.
For details on how to pay, see
here.
Got another question? Email us and we'll try to help.
