The dreaded VAT return is a bone of contention for many businesses. VAT returns have to be submitted every three months to HM Revenue & Customs (HMRC), with returns even having to be filed if you have no VAT to pay or reclaim.
By law, all businesses with a VAT taxable turnover of above £85,000 must register for VAT and submit these quarterly returns. Whilst submitting returns is getting simpler – Making Tax Digital (MTD) is an initiative we’ve wrote about and referenced many times in past blog posts – businesses are still committing a number of VAT errors and making the process of submitting VAT returns even more complex. A recent survey found that approximately half of all small to medium sized enterprises (SMEs) make mistakes when filing their VAT returns.
In this blog post, we take a closer look at the VAT mistakes most businesses are making, and reveal exactly how to correct them.
Not using the right rates
Many businesses fail to explore all their options when it comes to the VAT rates that are applicable to their taxable income. Small businesses in particular may be better off using the VAT Flat Rate Scheme, which aims to simplify the calculation of VAT and the submission of returns. To qualify for the VAT Flat Rate Scheme, your business must be registered for VAT and have a taxable turnover of £150,000 or less.
The VAT Flat Rate Scheme is an underrated government initiative despite it making the management and filing of company accounts more straightforward. See whether you are eligible to join the VAT Flat Rate Scheme to get started.
Trying to recover VAT for entertainment
Whilst wining and dining clients, subcontractors, suppliers and shareholders is no doubt a common business expense, it is important to recognise that claiming VAT on such meals and entertainment is forbidden by HMRC. Attempting to reclaim VAT in this area could leave you liable for penalties and interest.
Not asking for help
Getting the assistance you need to manage and file VAT returns is important, and can make your professional life a lot easier. Here at Hurren Accountants, we provide a great deal of VAT knowledge and deliver VAT services in accordance with the latest rules and regulations.
Let us guide you through the complicated world of VAT and make the submission of your quarterly VAT returns easy and accurate. Contact us today to find out more.