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HMRC requires all businesses with a VAT taxable turnover over the current VAT threshold to be VAT registered.
This is an area where we see lots of business owners, who haven’t taken professional advice on VAT, fall foul. The types of income and the period to consider when carrying out this turnover test is often misinterpreted.
Once registered, VAT should be charged on your sales and the VAT you pay on your business expenses can be reclaimed as an offset on your VAT returns. It is important however to understand the types of expenses where HMRC do not allow the VAT to be recovered, to ensure incorrect claims are not made. At Lima Accountancy, we can ensure this is carried out accurately.
Businesses can choose to register on a voluntary basis if they don’t meet the turnover threshold. There can be advantages to registering for VAT and we can advise on these whilst considering your customer base and the nature of your services.
There are also various schemes that can be utilised to ensure the VAT process works best for your business and does not create additional burden on your cash flow.
The thought of handling accounts and tax returns can be a terrifying prospect if you’ve never done it before. So, if you’re thinking of setting up a business, talk to a member of our friendly and approachable team today. For comprehensive accountancy services in West Yorkshire and across the UK, contact Lima Accountancy. You can then leave the accounts to us and can focus on making your business a success!