Tips to simplify VAT for Small Businesses

Handling VAT can be a confusing chore especially for company formation entrepreneurs and businessmen. But with the following tips and reminders you can simplify all of your VAT-related issues, most especially if you’re operating a small to medium-sized business.

Don’t hesitate to ask Customs for advice

Customs operates a National Advice Service helpline at 0845 010 9000. It is open from 8am to 8pm, Monday to Friday. You can call the helpline if you need any help or clarification about VAT.

Know when you should register for VAT

Determine the impact of VAT in growing your business turnover. You business plan must also look at how your business will deal with the impact of VAT registration. If, for example, your company provides services to the public, registering for VAT can have major effects on your pricing structure.

Constantly check on your turnover so you’ll know if you are nearing the VAT registration threshold

If you have registered for VAT, Customs will want to work with your business to help make the VAT process as easy as for you as possible. Apply with lots of time to spare so you can have your VAT number when you need it. It also allows you to study what schemes to you in order to make dealing with VAT a little easier.

Always keep your books current

Meticulous book keeping is an important aspect of good business management. Keep your books up to date because it will be difficult to sort out piles of documents months after. Check the documents you receive, as an example, you must have a VAT invoice in order to claim VAT. A good practice is to always enter cash receipts in your books before you use the cash to purchase anything.

Make your voice heard

Customs is there to help businesses with their VAT difficulties. IF you are unable to send your VAT return on time, you can phone Customs on 0845 010 9000 and tell them the reason why. You can consider making a partial payment in order to reduce the surcharge payment.

When talking with Customs, give them the information they need, the full facts and your VAT number

Customs need the complete facts in order to more effectively help you with your difficulties. Refrain from writing “I do not know” or “undecided” if the box asks for a specific information. Customs needs this infroamtion to discourage fraud as well as provide better customer service.

Manage VAT within the context of your business cashflow

There are businesses who use the VAT they have collected for their business before they submit it to Customs for payment. Although this can lessen a business’ borrowing, which could then save you interest charges, it still has to be managed carefully.

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