Don’t miss those all important Value Added Tax (VAT) deadlines otherwise it could prove costly especially if you make an error on your Return.  Here are some useful pointers on what to claim and how to avoid paying that penalty -   

What to look out for

If you’re not VAT registered make sure you monitor your turnover every month, because if you miss the deadline there will be a penalty.  At each month end you’ll need to check the value of the businesses’ taxable sales for the previous 12 months. If this exceeds £67,000 then you have one month to submit the VAT registration form (VAT1).  If at any time you expect the value to exceed the threshold in the next 30 days, then you must complete a registration form on the day that the expectation occurs.   If this happens contact us immediately. 

What you can claim

Once you’ve registered, you can claim VAT on goods or capital assets which were bought within three years before the date of registration and are still owned by the business.  This is only relevant if a valid VAT invoice is held and the goods are used for taxable activities.  You can also claim VAT on services up to 3 months before the date of registration, as long as the service has not been consumed before you registered.

Leave errors to your next VAT Return

From 1st July 2008 the threshold for error adjustments made on the next VAT Return has increased.  If the net amount of errors is under £10,000 (previously £2,000) then these can be included on the next VAT Return.  If the net value exceeds this figure then you’ll need to notify HM Revenue & Customs (VAT652). This may generate default interest on any underpayments.  If however the error is under £50,000 and is less than 1% of the net business turnover during that quarter, then this can also be included on the next Return.

If you’d prefer to get back to running your business and leave us to do your VAT Return then email lindsay.gray@dbsellek.co.uk