VAT Are you VAT registered, if not should you be registered? Even if you do not legally have to register it can be an advantage to register voluntarily. If you are registered you may not be aware that HMRC have set up a number of special schemes to help small businesses with their cashflow.
Annual Account Scheme
Make monthly or qaurterly payments based on an estimate of your total annual VAT bill. Any over/underpayment is settled at the end of the year.
Cash Accounting Scheme Under this scheme you will only have to pay VAT to HMRC when you have been paid by your customers.
Flat Rate Scheme Under this scheme VAT is calculated as a percentage of your turnover. The percentage is decided according to the trade sector you business is in.
CIS 2007
The new scheme was introduced on 6 April 2007 and there are now three levels of payment, gross, 20% net and 30% net. If you are not CIS compliant you could end up paying tax at the highest rate of 30%. The card system and monthly voucher production are no longer valid. Instead there is a verification system in place which means that HMRC need to be contacted in order to establish whether payment should be gross or net. Monthly returns must be made to HMRC and subcontractors paid net must be sent a statement showing tax deducted.
We can help you to ensure that you pay the right amount of tax and liase with HMRC to ensure that tax due is paid in a timely manner each month to avoid penalties.