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VAT Guides

Your business should register for VAT if your “taxable supplies” over the past 12 months has exceeded the VAT registration threshold. From April 2014, the VAT registration threshold is £81,000 (previously it was £79,000).
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Value Added Tax (VAT) is a tax on the final consumption of certain goods and services in the home market but is collected at every stage of production and distribution. Most business-related goods and services will therefore be subject to VAT.
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HMRC have provided a range of special schemes that apply to smaller businesses. They are designed to reduce administration, but also (in some cases) to assist cash flow.
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This guide outlines how VAT registered businesses should charge VAT on their goods and services, and how to reclaim VAT on purchases and costs.
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In the first in a short series of Value Added Tax bulletins for small businesses, Les Howard looks at what VAT is, and when you must register your business.
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In this article, we look at some simple VAT tips which could save your business time and money.
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If you are registered for VAT, have to file a VAT return in the near future, or are concerned about putting the wrong amounts on your VAT return, here are 5 VAT traps to watch out for.
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If you want to increase profits or cut costs, make sure you reclaim all the VAT you can.

It sounds obvious, doesn’t it? But even before the global economic slowdown began Ernst & Young surveys revealed “a surprising tolerance of failures to track, fully report and legitimately reclaim indirect taxes”. Businesses of all sizes are losing significant sums this way.

In this summary, we will focus only on the mountain of foreign EC VAT that goes unreclaimed.
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An alternative to the standard VAT scheme is the flat rate VAT scheme which offers qualifying businesses a simpler way of accounting for their VAT transactions.
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If you are dealing with a new customer and want to check whether the VAT number they have supplied is valid, there are several ways you can do so.
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The VAT cash accounting scheme is a useful tool for many small businesses, as you only repay VAT to HMRC once you have received payment yourself. If you have cashflow concerns, the scheme could be a lifesaver!
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This handy calculator will work out how much VAT you should charge a customer based on your net billing. Also use this script to work out how much VAT is included in a VAT-Inclusive sum.

The current VAT rate used in the calculations is 20%.
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Here are some tips to help small businesses keep on top of their VAT responsibilities – from choosing the right VAT scheme in the first place, to avoiding getting on the wrong side of HMRC.
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From 1st October 2007, new VAT invoicing regulations came into play which some small companies may not be aware of. From this date, all invoices issued should use an identifying number that is unique and sequential.
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The issue of VAT accounting when the goods involved are put to both business and non-business purposes is perhaps more widespread than many would first consider.

Careful use of the so-called ‘Lennartz Accounting’ scheme can provide cash flow benefit for a number of organisations.
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Value Added Tax (VAT) is a tax which is applied to transactions of most goods and services provided by VAT registered entities in the UK.
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