© Just4Contractors.com 2008
Cardwell Management Services UK Limited
Regency House, 45-51 Chorley New Road, Bolton, BL1 4QR
Cardwell Management Services UK Limited
Regency House, 45-51 Chorley New Road, Bolton, BL1 4QR
Local UK - Find businesses, shops, services anywhere across the UK.
Do I need to register for VAT?
Not necessarily so. It depends on your projected turnover. However, there are benefits of doing so.
VAT stands for Value Added Tax and is applied to most goods and services supplied in the UK. There are exemptions - loans. some property transactions, insurance and certain types of education and training are exempt. However, most freelance contractors won't be provided such exempt services.
When your turnover reaches a certain threshold or when it is projected to do so, you will need to be registered for VAT - keep an eye on the HMRC's website for the threshold amounts and for the VAT rates, which do change.
The advantages of registering for VAT is that you can reclaim the VAT that you pay to your suppliers. In addition, VAT registration provides you with increased credibility. .
However, once you register, you need to account for the 'output' tax on your taxible supplies and send in a regular return.
There are two main options when you register for VAT.
1. The standard registration and
2. The VAT Flat Rate Scheme - this was established to assist small business and to simplify the process. This allows you to pay VAT as a percentage of your turnover instead of having to work out the VAT on all your sales and purchases. This can help you in a number of ways;
- Simplify your record keeping – no need to separate out the gross, VAT and net values in your accounts
- Few rules to follow – no more problems about what “input tax” you can and cannot reclaim.
- Certainty and peace of mind – you always know how much of your takings you will need to pay to HMRC and with few opportunities for mistakes, you will have less worries
- You can apply to join the scheme if you expect that in the next 12 months:your taxable turnover (excluding VAT) will not be more than £150,000; and your total turnover (excluding VAT) will not be more than £187,500.
To see what flat rate to use, you need to look at the categories published by HMRC, and decide which one best describes what your business will be doing in the coming year.
See Also
HMRC Compliance
Recommended Links
HMRC VAT Guides
Not necessarily so. It depends on your projected turnover. However, there are benefits of doing so.
VAT stands for Value Added Tax and is applied to most goods and services supplied in the UK. There are exemptions - loans. some property transactions, insurance and certain types of education and training are exempt. However, most freelance contractors won't be provided such exempt services.
When your turnover reaches a certain threshold or when it is projected to do so, you will need to be registered for VAT - keep an eye on the HMRC's website for the threshold amounts and for the VAT rates, which do change.
The advantages of registering for VAT is that you can reclaim the VAT that you pay to your suppliers. In addition, VAT registration provides you with increased credibility. .
However, once you register, you need to account for the 'output' tax on your taxible supplies and send in a regular return.
There are two main options when you register for VAT.
1. The standard registration and
2. The VAT Flat Rate Scheme - this was established to assist small business and to simplify the process. This allows you to pay VAT as a percentage of your turnover instead of having to work out the VAT on all your sales and purchases. This can help you in a number of ways;
- Simplify your record keeping – no need to separate out the gross, VAT and net values in your accounts
- Few rules to follow – no more problems about what “input tax” you can and cannot reclaim.
- Certainty and peace of mind – you always know how much of your takings you will need to pay to HMRC and with few opportunities for mistakes, you will have less worries
- You can apply to join the scheme if you expect that in the next 12 months:your taxable turnover (excluding VAT) will not be more than £150,000; and your total turnover (excluding VAT) will not be more than £187,500.
To see what flat rate to use, you need to look at the categories published by HMRC, and decide which one best describes what your business will be doing in the coming year.
See Also
HMRC Compliance
Recommended Links
HMRC VAT Guides