Very often, a case of ‘should have left it up to the professionals’ of VAT Return Services in London occurs when smaller businesses that think they can handle their own accounting and VAT returns run into difficulties and consequently find themselves lost. Hundreds or even thousands of pounds in unclaimed VAT.
Office Assistants provides office administration of aaaaccounting and accounting services to small and medium-sized businesses in Essex and London. Recently, a company was called in to correct various inaccuracies that were the result of account-related tasks being left to an untrained staff member. In this case, the business had to pay for office assistants to make a large number of corrections when items had been placed in the wrong accounts, dates had been entered incorrectly, and paperwork was missing.
Unfortunately, problems like this are common in smaller companies, where they try to get away with keeping staffing and administration costs low by not using fully trained or qualified personnel. Literally, thousands of pounds are lost each year when things like VAT claims are not properly executed, and in this case, the amount that had been overlooked made a colossal difference to the business.
Very often, the option that seems cheaper at first can be much more expensive in the long run. Smaller businesses should seriously consider using a professional accounting firm to handle matters like VAT upfront so that they have accurate figures, prepared properly and on time, and the ability to plan financially ahead of time.
The UK VAT rate changes in early January 2011. Just a couple of years ago, we saw the rate drop to 15% and then go back to 17.5% a year later. Both times, many people were confused, and this change will probably be no different. It is important to understand the main issues to avoid getting into trouble. Here is a summary of key points to help you keep up with the changes.
- On January 4, 2011, the UK VAT rate changes from 17.5% to 20%. From that date, companies registered with VAT must charge the new VAT rate of 20% on all goods and services they provide, although companies exempt from VAT or those that use existing lower rates will not experience changes.
- It may happen that you work for a client before January 4 but invoice after that date. In that case, you can choose to use the VAT rate of 17.5% for that invoice. Obviously, future invoices will have to charge VAT at 20%.
- If someone has paid you a deposit, you must post the VAT of the deposit on the date it was paid (which can be 17.5%) and the final payment at the rate that was applied on the date of delivery or collection.
- The new fraction to calculate VAT from the gross amount paid is 1/6 p. Eg a £ 120 invoice including VAT will include £ 20 VAT. This is 1/6 of £ 120 and of course 20% of £ 100.
- You may have two VAT rates that apply to your VAT quarter. You simply have to make sure that the corresponding items have the VAT charged at the correct rate.