Insider's VAT guide, to help prepare companies for the upcoming changes in 2011, in association with Grant Thornton.
As All organisations want the peace of mind of knowing that they are dealing with their VAT affairs efficiently. VAT can represent up to 15 per cent of a business’ cash flow and, for many, it also represents a real cost. Insider, in association with Grant Thornton UK LLP, is on hand to offer expert advice.
VAT – the basics
All companies providing 'taxable supplied' goods or services must register for VAT with HMRC, provided their turnover for the previous 12 months passes the VAT threshold (currently £70,000), or the business believes it soon will.
However, not all goods and services are VAT chargeable, while some benefit from a reduced rate. Some items are either exempt or outside the scope of VAT. Exempt items include:
In addition to exemption, there are some goods or services that are zero-rated for VAT, which are counted as taxable but the rate applied is 0 per cent. If a business buys and sells mainly zero rated items it is possible to contact HMRC and become exempt from registering from VAT.
VAT is a changing landscape and at all stages of the business cycle, a VAT registered organisation must ensure its compliance procedures are robust enough to protect it from exposure to errors and smart enough to maximise its cash flow position. Where options exist on how to structure a transaction, the VAT costs need to be taken into account.
VAT – the issues
There are numerous VAT matters companies must be aware of to ensure compliance, including:
With VAT forming an important and sizeable part of a business' outgoings, it's important they receive the best possible advice. Experts from Grant Thornton are on hand to address the questions they face most regularly from their clients:
