If you’re a startup struggling with the complexities of business finance, one thing you need to know about is VAT returns. How do they factor into your business? Do you need to send them, even if you don’t have any VAT to pay or take back? How often do you need to send them? What are the penalties for getting it wrong? Running a business is stressful enough, but VAT returns can be a constant thorn in your side without some help figuring it out.
How Difficult is a VAT Return?
It depends on the size of your business and whether you’ve been keeping receipts. It’s a lot easier to estimate the total VAT claim when you have hard numbers to look at, but even then, the ‘correct’ amount of VAT you pay depends on a lot of things: special VAT schemes for some industries like retail, VAT can be charged at different rates at different times, and so on. If this sounds like rocket science, you’re not alone: but remember that there are plenty of accountants that can help, like us!
What Are The Penalties For Not Completing Them?
The due date for the submission of your VAT return is usually one month and seven days after the end of the VAT period. You can find precise deadlines on gov.uk. If you file your VAT return late, or your payment is late, then HMRC will record that you are in default.
You may need to pay a surcharge in addition to the VAT which is payable, the amount will depend on the number of times you have defaulted in a twelve month period. However, there will be no surcharge for the first time you default.
Whether by unfortunate circumstances or just plain bad luck, your business can be inspected at random by the HMRC. It depends on the field you operate in, the complexity of your business and whether your VAT returns add up. Needless to say, you don’t want the taxmen rummaging through your file cabinets, so you need to get those VAT returns spot on.
If VAT Returns sound too complex, stressful, or you just want some peace of mind from accounting, consider hiring NWD Accountancy to handle your VAT Returns, as well as other accounting and bookkeeping services.