Standard accounting
VAT on sales, minus VAT on costs
- Reclaim VAT on every business purchase
- Best when you buy a lot with VAT, or export
- VAT is due when you invoice, even if you are not yet paid
Companies · Sole traders · E-commerce
VAT registration and returns, without the expensive mistakes
Read aloud by your browser
Gone over the threshold? We register you, reclaim the VAT you are still entitled to on stock you already hold, choose the right scheme and check every return before it reaches HMRC.
£300VAT registration
£150returns from
Prices include VAT
Just gone over the threshold?
Do not lose the VAT you have already paid
Registering after months of trading feels like bad news. But VAT you paid before registration can often still be reclaimed in your first return, if it is done correctly.
- 1Goods you still hold: stock and equipment bought in the last four years. We count what is left, match it to your purchase invoices and claim the VAT.
- 2Services: received in the six months before registration, such as rent you paid in advance for the months after it, but only if your supplier charged you VAT.
- 3Not everything counts: goods already sold or used up, and costs without a VAT invoice, cannot be claimed. We tell you exactly what can.
What people get wrong
VAT: myth or fact?
“My neighbour does it” is the most expensive phrase in VAT. Tap each card to check.
Choosing the right scheme
Three ways to account for VAT
Each scheme has its own limits, rules for joining and leaving, and side effects. The right one depends on your margins, your costs and how quickly customers pay.
Flat Rate Scheme
A fixed percentage of turnover
- Simpler records, and a lower-cost return
- Popular with builders and drivers with hard-to-prove costs
- No VAT reclaimed on purchases, including stock held at registration
- For taxable turnover up to £150,000
Cash accounting
Pay VAT when you are paid
- Protects cash flow when customers pay late
- VAT on costs reclaimed when you pay them
- For taxable turnover up to £1.35 million
Why it matters
VAT mistakes come back years later
HMRC does not check today or tomorrow. It can look back four years, six if an error was careless. By then a small habit has become a large bill.
What we often find
Personal phones, trips and home purchases claimed as business costs. Fuel for a private car reclaimed in full. Errors no previous accountant ever corrected.
What it can lead to
Back tax, interest and penalties, a damaged credit history and reputation as a director, and in the worst cases the end of the business.
How we work
We check the documents behind every figure, tell you what you can and cannot reclaim, and explain why, so your return holds up if HMRC ever asks.
How it works
From registration to every return
Your return is built straight from your records and documents through Making Tax Digital software, so every figure can be traced.
- 1
Check
We confirm when you must register, or whether registering voluntarily makes sense.
- 2
Register
We complete your VAT registration with HMRC and choose the right scheme with you.
- 3
First return
We count your stock, gather pre-registration invoices and claim the VAT you are entitled to.
- 4
Every period
We check every invoice behind the figures, from your records or ours.
- 5
You approve
We send you the return and explain the figures before anything is filed.
- 6
File and pay
Filed through MTD software, with the amount and the date to pay.
Prices including VAT
Work out your VAT fee
For businesses that keep their own records. If you would like us to keep your books too, VAT is included in our monthly accounting.
Your estimated fee, including VAT
£1,200
a year
An estimate from your answers. A specialist confirms your exact fee in a free 15-minute Zoom meeting.
Book a free Zoom meetingQuestions
VAT questions
Scroll over them, use the arrows or select a question.
When your VAT-taxable turnover goes over £90,000 in any rolling 12 months, or you expect it to go over £90,000 in the next 30 days alone. The rolling test is checked at the end of every month, not once a year. You can also register voluntarily below the threshold.
Often, yes. You can usually reclaim VAT on goods you bought in the four years before registration that you still hold, such as stock and equipment, and on services received in the six months before. You need the VAT invoices, and the goods must be used for your VATable business.
Rarely. You charge VAT on every sale and pass it to HMRC, and you can only reclaim VAT on business costs that carried VAT. For most UK traders and service businesses, whose main cost is wages, VAT is an extra cost or a cash-flow burden. Exporters of goods, who zero-rate their sales, are the main exception.
You pay a fixed percentage of your VAT-inclusive turnover instead of working out VAT on each cost. It is simpler and the return costs less, but you generally cannot reclaim VAT on purchases, apart from some capital assets over £2,000. You can join while your taxable turnover is £150,000 or less.
You pay VAT when your customer pays you, not when you issue the invoice. If customers often pay late, it protects your cash flow. You can join while your taxable turnover is £1.35 million or less.
Only for business mileage, and the rules on cars, private use and fuel scale charges are strict. Wrong claims are one of the most common reasons for HMRC assessments and penalties. We tell you what you can and cannot claim before you file.
Usually four years, six where an error was careless and up to twenty where it was deliberate. A mistake today can turn into a large bill, interest and penalties years later, which is why we check every return before it goes in.
1 / 7
Thresholds and scheme limits as published by HMRC; check current guidance on GOV.UK.
Close to the threshold?
Talk to us before you register
We check your position, the scheme that suits you and what you can still reclaim.
Guides
Read before you decide
Plain-English guides by our accountants on the questions clients ask us about this service.
