VAT & DUTY

  1. VAT Return Services – Prepare and File VAT Return.
  2. Register for VAT
  3. Advise clients on VAT Schemes: [ Cash Accounting, Annual Accounting, Flat Rate & Retail Schemes]
  4.  Train staff on preparation and filing of VAT Returns.
  1. Standard Rate [ 20%] – Most Goods & Services
  2.  Reduced Rate [ 5% ]  – Some goods & services, eg child car seats and home energy.
  3. Zero Rate [ 0 % ] – Zero-rated goods & services, eg most food & child clothes

Flat Rate Scheme

£150,000 (or <) - Sales p.a

you pay a fixed rate of VAT to HMRC

you keep the difference between what you charge your clients & pay to HMRC

Cannot reclaim VAT on your purchases - except for certain capital assets over £2,000

Cannot use it with Cash Accounting, Margin or Capital Goods Schemes

Cash Accounting Scheme

£1.35m (or <) -Sales p.a

- pay VAT on your sales when your customers pay you -reclaim VAT on your purchases when you have paid your supplier

In Standard VAT, VAT due is difference between sales & purchase invoices even if they are not paid.

Cannot use it, if you use Flat Rate Scheme.

Annual Accounting Scheme

£1.35m (or <) - Sales p.a

Make advance VAT payments towards your VAT bill - based on your VAT bill - based on your last return

Submit 1 VAT Return a year.

Unsuitable if you regularly reclaim VAT, as VAT Refund is once a year.

VAT Margin Scheme

Tax the difference between what you paid for an item & what you sold it for, rather than the full selling price. You pay VAT at 16.67% (one-sixth) on the difference

Eligibility: You can only use it for: - second-hand goods - works of art - antiques & collectors’ items

You cannot use a margin scheme for: any item you bought for which you were charged VAT precious metals investment gold precious stones

Retail Scheme

Sales > £30m p.a

If you sell goods you must calculate how much VAT to record in your VAT account.

For goods sold inclusive of VAT, you must deduct the VAT you have to record. If sold exclusive of VAT, add it.

It can make calculating your VAT simpler. Instead of calculating the VAT for each sale you make, you do it once with each VAT return.

Retails Schemes (..cont )

Can use it with Cash & Annual Accounting Schemes.

Cannot use it, if you use Flat Rate Scheme.

3 VAT retail schemes: 1. Point of Sale Scheme - you identify and record the VAT at the time of sale 2. Apportionment Scheme - you buy goods for resale 3. Direct Calculation Scheme - you make a small proportion of sales at one VAT rate and the majority at another rate.

VAT and Foreign Trade

EORI - Economic Operations Registration [ GB eori /EU eori]

Who needs an EORI You may need an Economic Operators Registration and Identification number (EORI number) if you move goods: 1) between GB-Great Britain (England, Scotland & Wales) or the Isle of Man & any other country (including EU) 2) between Great Britain & N.Ireland 3) between GB & Channel Islands 4) between N.Ireland & countries outside EU

To get an EORI number, your business usually needs to have premises based in the country you want to import to or export from - this is called ‘being established’.
Your premises needs to be one of the following: a) a registered office b) a central headquarters c) a permanent business establishment - premises where some of your customs-related activities take place and your HR and technical resources are permanently located

You do not need an EORI number if you’re moving goods for personal use only.

If your business is not based in the country you’re moving goods to or from You should still get an EORI number if you’re:
1. making a customs declaration - check if you’re eligible to make a customs declaration
2. making an entry summary declaration
3. making an exit summary declaration
4. making a temporary storage declaration
5. making a customs declaration for temporary admission or re-export declaration where you have a guarantee
6. acting as a carrier for transporting goods by sea, inland waterway or air
7. acting as a carrier connected to the customs system and you want to get notifications regarding the lodging or amendment of entry summary declarations
8. established in a common transit country where the declaration is lodged instead of an entry summary declaration or is used as a pre-departure declaration

If you’re not eligible to apply for an EORI no. yourself, you’ll need to appoint someone to deal with customs on your behalf. The person you appoint will need to get the EORI number instead of you.

If you’re based in the Channel Islands and you move goods to or from the UK, you do not need an EORI number. You’ll need an EORI number if you use HMRC’s customs systems like Customs Handling of Import and Export Freight (CHIEF).

When you’ll need your EORI number You’ll need your EORI number if you: appoint someone to deal with customs for you and are ‘established’ in the country you’re importing to or exporting from make customs declarations use customs systems, such as the CHIEF system and the Import Control System Northern Ireland (ICS NI) apply for a customs decision