A summary of the simple tips that will help ensure that you are producing and submitting your VAT returns correctly.
VAT returns can prove to be a panic-inducing pair of words for any business owner. Preparing a VAT return often brings about concerns around the complexity of the process and the mathematical equations that come with it. However, once you get a grasp on the basics, there is no need to panic at the prospect.
While mastering every aspect of the VAT return may take time, here are a few tips that you can use as a rough guide around getting the basics right.
First Tip – Complete Your VAT Return In Time
It sounds basic, and it is quite as simple as it sounds. Making sure that you sort your VAT return within the given timeframe is critically important. Namely because failing to do so will result in penalties for your business including the potential for having to pay extra money. A consequence that no business wants to face. Especially when it is avoidable.
When is this deadline? It usually falls one month and seven days after the end of the accounting period. For most this happens quarterly, but you do also have the option of choosing a monthly or annual structure if that better suits you.
Important note – this deadline includes the time that it takes for your return to reach HMRC. Be sure to factor this into your calculations.
Make sure that you make a note of when these deadlines fall and when the return needs to be submitted. This helps ensure that such deadlines are met and the correct forms submitted on a monthly/quarterly/annual basis, depending on which one you opt for
Tip Two – Take International Payments Into Account
Businesses have become increasingly global in recent years. Whether it be suppliers, clients or the customer base, it is not often that a company keeps the entirety of its proceedings in its country of origin.
Trading abroad brings both a new customer base and a new set of rules to be aware of. Particularly in reference to VAT returns. Unfortunately, it is not a simple affair.
In fact, overseas VAT returns come with a whole host of new rules. The most important things to note are whether invoices from abroad include overseas VAT or a reverse charge. Both of these affect the costs of services and may be recoverable, so be sure to double check. For a full scope on overseas VAT guidelines, check the HMRC guide.
If you don’t want to sift through this extensive guide, hiring the help of an accountant is probably a smart move. Make sure that you get help from someone with experience both in this area and within your field of expertise. For example, those working in marketing would be smart to seek the help of experienced accountants for marketing agencies.
Third Tip – Take Care Of Your VAT Receipts
The third and final tip is to look after your VAT receipts. This helps to make sure that you don’t lose track of your spending and that nothing needlessly falls through the cracks.
Keeping a record of your receipts – whether by storing them away safely or using more modern methods – is vital to making sure that VAT receipts aren’t missed. No one wants to spend the end of the financial period frantically searching for receipts that they cannot locate. By being organised in this regard, you are making sure that you don’t fall victim to such slip ups further down the line.
While you can choose to keep a record of physical receipts, modern cloud accounting has reduced the need for such actions. Platforms such as Xero – and indeed dedicated Xero accountants – help make the process a whole lot easier. Simply take a snap of the receipt when you are given it and upload it to the cloud. This means that all is stored in a safe place from the moment that the purchase is made.
