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Remigius https://remigius.co.uk Quality accounting Fri, 09 Nov 2018 13:51:33 +0000 en-US hourly 1 https://wordpress.org/?v=5.7.1 WHO MUST SUBMIT A TAX RETURN https://remigius.co.uk/2018/10/21/who-must-submit-a-tax-return/?utm_source=rss&utm_medium=rss&utm_campaign=who-must-submit-a-tax-return https://remigius.co.uk/2018/10/21/who-must-submit-a-tax-return/#respond Sun, 21 Oct 2018 13:48:45 +0000 https://remigius.co.uk/?p=453 WHO MUST SUBMIT A TAX RETURNContrary to what most persons may think, not everyone is required to file a federal tax return, and according to the HMRC, several persons who are not required to file a tax return do so because they are unaware of what’s required of them. Therefore in this article, we will be taking a look at …

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Contrary to what most persons may think, not everyone is required to file a federal tax return, and according to the HMRC, several persons who are not required to file a tax return do so because they are unaware of what’s required of them. Therefore in this article, we will be taking a look at persons who are required to file a tax return.

You are required to file a tax return for the previous year if:

• you earned over £1,000 from self-employment – this qualifies as your ‘trading allowance.’

• you earned over £2,500 from putting your property on rental

• you earned over £2,500 from untaxed income like commissions or tips

• your income from savings or investment was £10,000 or more before tax including money from bare trusts or interest in possession trusts.

• your earnings from dividends from shares was £10,000 or more before tax

• you earned profit from selling trading in shares, real estate or other capital assets and need to pay capital gains.

• your income (or partners) was over £50,000, and either of you claimed child benefits

• you had earnings from abroad which you needed to pay tax on

• your taxable income was over £10,000

• you were trustee or trust to a registered pension scheme or trust

• you did not pay enough in tax the previous year

• your state pension was greater than your personal allowance and was your only source of income

You would also be required to send in a tax return if you:

• need to prove you are self-employed

• want to make voluntary Class 2 National Insurance payments, so you qualify for benefits

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HOW TO REGISTER AS SELF-EMPLOYED https://remigius.co.uk/2018/10/09/how-to-register-as-self-employed/?utm_source=rss&utm_medium=rss&utm_campaign=how-to-register-as-self-employed https://remigius.co.uk/2018/10/09/how-to-register-as-self-employed/#respond Tue, 09 Oct 2018 13:41:36 +0000 https://remigius.co.uk/?p=450 HOW TO REGISTER AS SELF-EMPLOYEDIf you have finally made up your mind to exit the rat-race and set up your venture, there are some things you need to do to ensure you are in the HRMC’s good books. Failing to do so will not only make your life difficult but risk hefty financial penalties. Usually, even if you have …

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If you have finally made up your mind to exit the rat-race and set up your venture, there are some things you need to do to ensure you are in the HRMC’s good books. Failing to do so will not only make your life difficult but risk hefty financial penalties.

Usually, even if you have already completed your tax returns, by the time you become self-employed, you will need to register for self-assessment and Class 2 National Insurance. If by October 5th of your businesses second year of operation you haven’t registered, you could be fined for it. In registering as a self-employed, there are three options available to you. You can register as a sole trader, a partnership or a limited liability company. However, whichever you choose, there are 9 general steps you must follow, and they include:

• First, you have to create a Government Gateway account, and you will need to provide your name, an email address and a password. To proceed to the next step, they will send you a user ID.

• You will use the user ID they give you to sign into the tax service page. Next, you register as self-employed for Self-Assessment tax and include your tax, duty or scheme.

• You will be asked the kind of tax you want to add. Select Self-Assessment, then choose a category. There are three major categories which are sole-trader, partnership and trust.

• Next, add a date you began working as a self-employed and earning from it.

• HMRC will require some additional information like your home address, contact detail, National Insurance number and some other information which relates to your business model.

• Next, you will be asked the business you do, and a summary such as “writer” or “painter” would do.

• Crosscheck your information and submit

• Once your application has been received, you will receive a letter from HMRC containing a 10-digit Unique Taxpayer Reference (UTR).

• Finally, you will be enrolled for Self-Assessment and officially be declared self-employed.

SETTING UP AS A SOLE-TRADER

Registering as a sole-trader means you don’t have to deal with as much paperwork as the other routes and much of the paperwork you will be doing, you can handle yourself. Also as a sole trader, you don’t have to make information relating to your business public. However, as a sole trader, there is no distinction between your private property and business assets, so it’s essential you have your books in order or risk life-altering losses.
To register as a sole-trader, follow the steps above.

SETTING UP AS A PARTNERSHIP

There are a couple of advantages of setting up as a partnership and usually, the more partners involved in the business, the more startup capital there is. Also, there is more input into the creative and decision-making process. However, with a partnership, there might be arguments or friction in the course of running the business, and partners are liable for any debts which the business incurs.
To register a partnership, you would need to register as a self-employed like above, and you won’t have to deal with any of the paperwork required from limited companies. However, you will need to submit individual paperwork and tax returns as needed from sole traders.

SETTING UP AS A LIMITED COMPANY

The primary benefit of setting up as a limited company is that your personal and business assets are separate so if the business fails, your personal belongings cannot be used to cover the loss.
To register as a company, you would first register online, and you can do this if shares restrict your company. Alternatively, you can register by post and same day but for an extra fee.

At Remigius, we can help you decide which business model best suits your company and provide you with the needed support to get you registered.

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2018-19 Income Tax Changes https://remigius.co.uk/2018/04/23/2018-19-income-tax-changes/?utm_source=rss&utm_medium=rss&utm_campaign=2018-19-income-tax-changes https://remigius.co.uk/2018/04/23/2018-19-income-tax-changes/#respond Mon, 23 Apr 2018 09:43:11 +0000 https://remigius.co.uk/?p=441 2018-19 Income Tax ChangesMany of the various tax rates and allowances change each April 6th, almost without being noticed. Here is a summary of this year’s changes to our Income Tax Allowances. Personal Allowance In 2017/18 you were allowed to earn £11,500 pa before paying Income Tax. This allowance has been increased to £11,850 pa. Marriage Allowance In …

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Many of the various tax rates and allowances change each April 6th, almost without being noticed. Here is a summary of this year’s changes to our Income Tax Allowances.

Personal Allowance
In 2017/18 you were allowed to earn £11,500 pa before paying Income Tax. This allowance has been increased to £11,850 pa.

Marriage Allowance
In 2017/18 you were allowed to transfer up to £1,150 of any unused Personal Allowance to your spouse or civil partner. This allowance has increased to £1,185 pa. and making use of it could save you £237.00 pa in tax.

Married Couples Allowance
This addition allowance is available to you if you or your partner were born before 6/4/1935. This allowance has increased from £8,445 to £8,695 pa (Relief at 10%). An income limit applies, which has also been increased.

Blind Person’s Allowance
This additional allowance has been increased from £3,260 pa to £3,360 pa

Dividend Allowance
This allowance has reduced!! In 2017/18 you were allowed to receive £5,000 pa in Dividends before paying Dividend Tax. This allowance has reduced so that you are now allowed to receive only £2,000 pa in Dividends tax-free.

Personal Savings Allowance
This allowance has remained unchanged, however it is worth remembering that basic rate taxpayers can receive up to £1,000 savings interest, tax-free. Higher rate taxpayers can receive up to £500 savings interest, tax-free.

If you need any help understanding any of these allowances, and how they may apply to you please CLICK HERE to contact us and we will be very pleased to help.

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Sole Traders Should Act Now to Submit Their Tax Returns https://remigius.co.uk/2017/12/18/sole-traders-act-now-submit-tax-returns/?utm_source=rss&utm_medium=rss&utm_campaign=sole-traders-act-now-submit-tax-returns https://remigius.co.uk/2017/12/18/sole-traders-act-now-submit-tax-returns/#respond Mon, 18 Dec 2017 10:57:42 +0000 https://remigius.co.uk/?p=437 Sole Traders Should Act Now to Submit Their Tax ReturnsWith Christmas right around the corner, the last thing you want to be thinking about is your tax returns. After all, December is usually a time to wind down your workload before the end of the year, and filling out tax forms is only going to add more to that workload. However, as with most …

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With Christmas right around the corner, the last thing you want to be thinking about is your tax returns. After all, December is usually a time to wind down your workload before the end of the year, and filling out tax forms is only going to add more to that workload. However, as with most things in life, there’s no time like the present for preparing these important documents, and if you act now, you could save yourself a whole lot of hassle later on.

As you probably already know, each tax year begins and ends in April, and you have until the end of January to file your tax returns for the previous year. If you’re registered as a sole trader, then it’s up to you to ensure that all your tax returns are fully accurate and filed before that deadline. Many sole traders, especially new start-ups don’t earn enough to warrant hiring an accountant, which means the vast majority of them- perhaps you included- will have to traverse the often complex world of forms and red tape by themselves. That makes it all the more important that you spend plenty of time checking over your tax returns carefully, to ensure that you don’t make any minor mistakes that could ultimately cost you big-time.

For that reason, it’s a bad idea to fill out your tax returns in a rush. However, you’d be surprised how many sole traders end up doing just that, by leaving the task until after they come back from their Christmas break. Often, they haven’t even begun to go their financial affairs, and then suddenly remember that they have a big undertaking on their hands. Filing your tax returns involves going through all your paperwork from the last year, and if you don’t get things exactly right, then you risk either paying too much tax, or underpaying HMRC and possibly facing financial penalties.

For that reason, it’s a smart idea to at least make a start on your sole trader tax returns well in advance. If you get all the paperwork in order before your Christmas break, then you can afford to take your time over things, and ensure that your returns are fully accurate. Instead of getting yourself in a panic and rushing things, you won’t make silly mistakes that could cost you big in the long run. After all, when you get back to work in January, you’ll already have plenty on your plate without having complex tax returns to worry about. So, do yourself a favour, and get them filed as soon as possible- then you can enjoy a stress-free Christmas!

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Not submitted your 2015/16 Self Assessment Tax Return? https://remigius.co.uk/2017/03/14/late-self-assessment-tax-return/?utm_source=rss&utm_medium=rss&utm_campaign=late-self-assessment-tax-return https://remigius.co.uk/2017/03/14/late-self-assessment-tax-return/#respond Tue, 14 Mar 2017 10:15:57 +0000 http://www.remigius.co.uk/?p=233 So you still haven’t submitted your 2015/16 Self Assessment Tax Return?  The deadline date for submitting your on-line self assessment tax return passed approximately six weeks ago, so If you needed to and didn’t submit a tax return, HMRC will impose an automatic fine of £100. Additional financial sanctions will be imposed if you fail …

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So you still haven’t submitted your 2015/16 Self Assessment Tax Return? 

The deadline date for submitting your on-line self assessment tax return passed approximately six weeks ago, so If you needed to and didn’t submit a tax return, HMRC will impose an automatic fine of £100. Additional financial sanctions will be imposed if you fail to submit your return after a further three, six and twelve months.

What next?

If you contact HMRC with a reasonable explanation that is acceptable by them, they might extend the deadline for you to submit your return. If you didn’t realise that you needed to submit a self assessment tax return, (you might receive additional income or are no longer entitled to child benefit) you should contact HMRC to make a voluntary disclosure, which is always viewed more favourably.

However, you should submit your return as a matter of urgency, including a full explanation for the late submission in the appropriate space. In addition to the automatic fine of £100, you could also face additional charges for Interest accrued, plus a 5% surcharge on any tax payable. Once the return has been submitted, if you can’t afford to pay the tax due, you could ask HMRC to consider putting a ‘Time To Pay Plan’ in place.

What if I don’t submit my return?

In addition to the above charges, you face a penalty of £10 per day, up to a maximum of £900. If you are six months late with your return & payment, you then face a financial penalty of £300 or 5% of the total tax liability. If you are more than twelve months late you face a further fine of £300 or a further 5% of the total tax liability. In any event, Interest will also be added for late payment. HMRC can also increase the penalty for a return that is more than twelve months late, if they consider that you have witheld information. The penalty can be up to 200% of the total tax liability if offshore evasion is proven, and can be up to 100% if there are no offshore tax issues.

Furthermore, as a result of failing to file your Self Assessment Tax Return on time, HMRC could launch a tax investigation, and as HMRC have task forces looking at individual’s tax affairs, there is every likelihood of them catching up with you.

Who can help me?

If you appoint Remigius to act as your self assessment tax agent, we will work with you to complete and submit your tax return as quickly as possible. We would liaise with HMRC on your behalf (so you don’t have to), to minimise their fines and surcharges, and would then work closely with you to ensure that all future HMRC deadlines are met.

Contact us today to discuss how we can help, and to arrange a ‘without obligation’ quote.

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Our Services https://remigius.co.uk/2017/02/20/our-services/?utm_source=rss&utm_medium=rss&utm_campaign=our-services https://remigius.co.uk/2017/02/20/our-services/#respond Mon, 20 Feb 2017 12:37:51 +0000 http://www.remigius.co.uk/?p=225 Remigius Bookkeeping & Accountancy look after the accounting and taxation needs of many sole traders, by providing an all inclusive service for a small monthly fee. By working closely with our clients we are able to provide recommendations to improve tax efficiency, record keeping, and even recommend suppliers who could help them to reduce their …

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Remigius Bookkeeping & Accountancy look after the accounting and taxation needs of many sole traders, by providing an all inclusive service for a small monthly fee.

By working closely with our clients we are able to provide recommendations to improve tax efficiency, record keeping, and even recommend suppliers who could help them to reduce their costs, and/or increase sales.

Sole Traders All Inclusive Service

  • A dedicated AAT qualified accountant with easy access for help and advice
  • A dedicated agent to represent you on all matters with HMRC
  • Production of your annual accounts
  • Completion and submission of your on-line self assessment return
  • Ongoing tax efficiency advice
  • Cash flow forecasting advice
  • A free review of all suppliers, including website and social media

From only £20.00 (ex vat) per month

Some clients prefer to complete their own bookkeeping to minimise costs, however for those who prefer not to, we also offer a complete bookkeeping service, using cloud based software, if desired.

If you are a Sole Trader, who would like to spend more time on your business, and less time on your accounts, please CONTACT US and we will be very pleased to help.

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Business Bicycle Mileage Allowance https://remigius.co.uk/2017/02/01/business-bicycle-mileage-allowance/?utm_source=rss&utm_medium=rss&utm_campaign=business-bicycle-mileage-allowance https://remigius.co.uk/2017/02/01/business-bicycle-mileage-allowance/#respond Wed, 01 Feb 2017 09:19:56 +0000 http://www.remigius.co.uk/?p=219 It is a quite normal practice for employees to be reimbursed for business use of their own car/van or motorcycle. However, many businesses don’t know that they can offer their employees an HMRC approved Mileage Allowance Payment (MAP) of up to 20p per mile, if they use their privately owned bicycle to travel for business …

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It is a quite normal practice for employees to be reimbursed for business use of their own car/van or motorcycle.

However, many businesses don’t know that they can offer their employees an HMRC approved Mileage Allowance Payment (MAP) of up to 20p per mile, if they use their privately owned bicycle to travel for business use.

This enlightened approach to business travel could offer several benefits, such as:

  • 20p per mile would not give rise to a tax liability for the employee
  • Kinder to the environment
  • Healthier & happier employees
  • Lower costs for the business

The employee should record their business mileage on an expense claim form, providing the following information:

  • The date and reason for the journey
  • The starting point, places visited on route and the point at which the journey ended
  • Names and addresses of persons visited.
  • Mileage claimed for each trip

If an employee is paid less than 20p per mile, they will be able to make a claim to HMRC for tax relief on the difference (Mileage Allowance Relief). This relief will be used to reduce the amount of tax due on their wages. To make a valid claim they will need to keep a record of their business mileage and the MAPs made by their employer.

NB: Business Mileage Allowance cannot be claimed for normal home to/from office mileage.

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Tips for setting yourself up as a sole trader with HRMC https://remigius.co.uk/2017/01/18/setting-yourself-up-as-a-sole-trader/?utm_source=rss&utm_medium=rss&utm_campaign=setting-yourself-up-as-a-sole-trader https://remigius.co.uk/2017/01/18/setting-yourself-up-as-a-sole-trader/#respond Wed, 18 Jan 2017 09:15:32 +0000 http://www.remigius.co.uk/?p=213 If you have decided to work for yourself as a sole trader, here are some tips for setting yourself up with HMRC What is a sole trader? A sole trader is someone who runs their own business as an individual, and is self-employed. HM Revenue & Customs (HMRC). Sole traders must register with HMRC and …

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If you have decided to work for yourself as a sole trader, here are some tips for setting yourself up with HMRC

What is a sole trader?

A sole trader is someone who runs their own business as an individual, and is self-employed.

HM Revenue & Customs (HMRC).

Sole traders must register with HMRC and follow certain rules when naming and running their business.

Registering to file your self assessment tax return.

You should register for self assessment and class 2 National Insurance as soon as possible after starting your business, regardless of whether you have previously completed tax returns. You should register by October 5th in the second tax year, or you could face a HMRC fine.

If you have submitted a tax return before.

– Register online with HMRC (www.online.hmrc.gov.uk/shortforms/form/CWF1ST). You will need your 10 number Unique Taxpayer Reference (UTR) from your previous registration for self assessment.

– If you have previously registered for on-line services you should use the same account.

If you haven’t submitted a tax return before.

– Register online with HMRC (www.online.hmrc.gov.uk/registration/newbusiness/introduction) and you will receive a 10 number Unique Taxpayer Reference (UTR). Alternatively you can complete an on-screen form, to print off and post to HMRC.

– You will be enrolled to use the self assessment on-line service at the same time.

– You should receive a letter within 10 working days with an activation code, which you will use when you first log in to your on-line account.

Your responsibilities include:

– Keep records of your business sales and expenses

– Send a self assessment tax return every year

– Pay Income tax on your profits, and class 2 & class 4 national Insurance

Value Added Tax (VAT).

You can voluntarily register for VAT if its suits your business, however you must register for VAT if your turnover exceeds £83,000.

Working in the Construction Industry?

If you are working in the construction industry as a sub contractor or contractor, you should register for the Construction Industry Scheme (CIS).

Naming your business.

– As a sole trader you don’t have to register with Companies House – but you still need to follow the rules for choosing a business name.

– You can trade under your own name or under a business name. However you can’t use a business name that is the same as, or ‘too similar’ to, another registered business, so we would suggest that you search the companies house on-line register to see if your preferred name has been taken. Your business name also must not contain a sensitive word or expression, be offensive, or suggest a connection with government or local authorities.

If you need help with registering as a sole trader, the preparation of your annual accounts, and filing your self assessment tax return with HMRC please use the contact us facility and we will be very pleased to help.

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What is the Annual Accounting VAT Scheme? https://remigius.co.uk/2016/12/12/annual-accounting-vat-scheme/?utm_source=rss&utm_medium=rss&utm_campaign=annual-accounting-vat-scheme https://remigius.co.uk/2016/12/12/annual-accounting-vat-scheme/#respond Mon, 12 Dec 2016 10:36:13 +0000 http://www.remigius.co.uk/?p=207 The Annual Accounting scheme enables VAT registered businesses to submit their VAT returns annually, rather than quarterly. The main features of the scheme are: Available for traders with an annual taxable turnover of up to £1.35 million at the time the scheme commences. Taxable turnover includes sales at standard, reduced or zero rated VAT, but …

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The Annual Accounting scheme enables VAT registered businesses to submit their VAT returns annually, rather than quarterly. The main features of the scheme are:

  • Available for traders with an annual taxable turnover of up to £1.35 million at the time the scheme commences.
  • Taxable turnover includes sales at standard, reduced or zero rated VAT, but excludes VAT itself.
  • The scheme can be operated in conjunction with the flat rate scheme, or the cash accounting scheme, but not both.
  • If annual taxable turnover subsequently exceeds £1.35 million, the trader can continue in this scheme until taxable turnover reaches £1.6 million.
  • The trader must pay 90% of an estimate made of the likely annual VAT payment, normally paid electronically by making nine equal interim payments starting in the fourth month of the VAT year.
  • Alternatively the trader can pay by making three interim payments, each of 25% of the previous year’s VAT liability or 25% of the likely annual VAT liability if the business has been VAT registered for less than 12 months. This is payable in months 4,7 and 10 of the annual accounting period.
  • The trader must pay any balance due with the annual electronic VAT Return, due two months after the end of the VAT year.

The timing of payments

Mth

1

2

3

4

5

6

7

8

9

10

11

12

13

14

9 Interim Payments

 

 

 

1

2

3

4

5

6

7

8

9

 

10

3 Interim Payments

 

 

 

1

 

 

2

 

 

3

 

 

 

4

What are the advantages and disadvantages of the scheme?

Advantages

  • The scheme helps smooth out its cash flow by paying a set amount each month, or quarter.
  • A business only needs to submit one VAT Return each year, instead of four.
  • A business is allowed two months instead of one to complete and submit the on-line annual VAT Return and send the balancing payment.

Disadvantages

  • If you regularly reclaim VAT (if you supply zero rates goods such as books) you only receive one repayment each year.

If you need advice about whether the Annual Accounting VAT scheme would benefit your business, please use the CONTACT US facility and we will be very pleased to help.

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What is the Flat Rate VAT Scheme? https://remigius.co.uk/2016/11/22/flat-rate-vat-scheme/?utm_source=rss&utm_medium=rss&utm_campaign=flat-rate-vat-scheme https://remigius.co.uk/2016/11/22/flat-rate-vat-scheme/#respond Tue, 22 Nov 2016 14:47:03 +0000 http://www.remigius.co.uk/?p=200 The flat rate scheme is designed for small businesses with annual taxable turnover that doesn’t exceed £150,000 and whose annual total turnover (including income on which no VAT is paid) doesn’t exceed £230,000. It is significantly different from normal VAT schemes in which input (purchases) VAT and output (sales) VAT is identified & recorded with …

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The flat rate scheme is designed for small businesses with annual taxable turnover that doesn’t exceed £150,000 and whose annual total turnover (including income on which no VAT is paid) doesn’t exceed £230,000.

It is significantly different from normal VAT schemes in which input (purchases) VAT and output (sales) VAT is identified & recorded with the balance being paid to HMRC, or reclaimed if tax on expenses exceeds tax on sales.

When using the flat rate scheme, the business doesn’t have to identify and record every single VAT transaction to be able to calculate the net amount of VAT due. Instead, a flat rate percentage is charged on the total sales, Including VAT for each VAT period. The calculation produces the amount of VAT due.

The flat rate varies with trade sectors, here are some examples:

  • Photography: 11%
  • Pubs: 6.5%
  • Food & Newspaper Retail: 4%
  • Bookkeeping Services: 14.5%

An added benefit of the flat rate scheme is that a business, in its first year of VAT registration, receives a 1% reduction in its applicable flat rate percentage for 12 months following registration.

Calculating how much VAT you owe.
The calculation of the flat rate scheme is simple. Suppose you are a Pub Landlord and your quarterly sales income is £24,000, including VAT. Your flat rate is 6.5% and so your VAT liability is; £24,000 x 6.5% = £1,560

If you provide bookkeeping services and your quarterly sales income, including VAT, is £24,000, your VAT liability is; £24,000 x 14.5% = £3,480

How much VAT do you charge customers?
It is important to note that the flat rate is only used to calculate the amount of VAT you owe, because an allowance is made for input tax. Therefore, you charge your customers at the normal rate of VAT, currently 20%, and not at the flat rate!

Is the flat rate scheme right for my business?
However, the decision of whether to use the flat rate scheme does need careful consideration, as there are some circumstances where this scheme would leave you worse off. For example, if you sell zero rated goods (e.g. books), and you normally reclaim VAT because your inputs are higher than your outputs, you wouldn’t use the flat rate scheme. Unless you want to give your money away to HMRC!

Whilst you can’t reclaim VAT on purchases, you can reclaim the VAT for the purchase of certain capital assets (e.g. a computer) over £2,000 including VAT. However, if you sell it again, you will have to charge VAT at the full rate, and pay the VAT you receive to HMRC via the quarterly VAT Return.

The following records need to be kept for the flat rate scheme:

  •  The flat rate sales turnover for the accounting period.
  • The flat rate percentage used.
  • The VAT calculated as due.
  • A VAT account – recording VAT paid under the scheme, and any VAT involved in the purchase or sale of a capital asset.

The flat rate scheme may also be operated with the annual accounting VAT scheme, making dealing with VAT far simpler for the small business. In this case not only is the VAT calculated as a basic percentage, it’s also only calculated one a year.

If you need advice about whether the flat rate VAT scheme would benefit your business, please use the CONTACT US facility and we will be very pleased to help.

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