For Your Business

VAT

VAT registration, returns, and making sure you’re on the right scheme – all of it sits on top of a set of rules that HMRC changes more often than most business owners realise. We handle VAT for businesses: from the initial decision about whether and when to register, to quarterly returns filed on time, to the Making Tax Digital compliance that’s already mandatory for every VAT-registered business.

In a nutshell: we prepare and file your VAT returns, make sure you’re on the scheme that suits your business, and deal with HMRC when they have questions. Fixed fee, agreed upfront. No surprises at the end of the quarter.

When Do You Need to Register for VAT?

You must register for VAT once your taxable turnover in any rolling 12-month period exceeds the VAT registration threshold. The threshold figure occasionally changes – HMRC publishes the current rate, and we link through to the source rather than repeat a number that may have moved since this page was written.

There are two important points most business owners miss:

The rolling 12-month rule.

The threshold applies to any rolling 12-month period, not a calendar or tax year. If your turnover creeps past the threshold in the months to April and you only check at your year-end in December, you should have been compulsorily registered – and liable for VAT on everything you charged – for eight months without knowing it. If we do your bookkeeping, we watch this for clients and flag it before it becomes a problem. If we think you are getting close when we prepare your year end, we’ll remind you to keep an eye on it.

Voluntary registration.

You can register before you hit the threshold, and for some businesses, it makes sense. If most of your clients are VAT-registered businesses (who can reclaim the VAT you charge), adding VAT to your invoices costs them nothing, and you can reclaim the VAT on your purchases. For businesses with significant input costs, the reclaim will often outweigh the admin overhead. We model the numbers before you commit.

VAT Schemes: Which One Suits Your Business?

Not every VAT-registered business uses the standard scheme. The three alternatives worth knowing:

Flat Rate Scheme. You charge VAT at the standard rate (usually 20%) but pay HMRC a flat percentage of your gross turnover – a lower rate that varies by industry. The difference is yours to keep. It greatly reduces admin, but the flat rate scheme has a ‘limited cost trader’ rate of 16.5% that removes much of the benefit for labour-intensive businesses with few input costs. It’s worth running the numbers each year.

Cash Accounting Scheme. You account for VAT based on payments received and made, rather than on invoices issued. Useful if you have significant debtor days – you don’t pay VAT to HMRC until your customer has paid you. Available to businesses with taxable turnover below £1.35 million.

Annual Accounting Scheme. You make advance payments on account throughout the year and file a single annual return. Reduces the quarterly admin cycle. Available to businesses with taxable turnover below £1.35 million.

We review which scheme is optimal for your business when we take you on and flag any change worth considering as the business grows.

Making Tax Digital for VAT

Making Tax Digital for VAT is now mandatory for all VAT-registered businesses. In practice, it means:

VAT records must be kept digitally (in software, not spreadsheets – unless you’re using HMRC-approved bridging software)

Returns must be submitted digitally through MTD-compatible software – HMRC’s own portal no longer accepts manual VAT submissions.

For clients on Xero or FreeAgent the MTD compliance is built in. If you’re still running your VAT records in a spreadsheet, get in touch. The fix is simple, but it needs to be done before the next quarter.

How We Work

Each quarter, three steps.

We’ll prepare your return. Your bookkeeping records in Xero or FreeAgent feed the VAT return directly. We review the return, check the categorisation, and pick up anything that needs a conversation – a purchase that needs partial exemption treatment, a disposal that creates an input tax question, or a late invoice you want to include.

We’ll send it to you to approve. You see the figures before anything goes to HMRC. No surprises.

We’ll file it and tell you what to pay and when. Payment due dates are noted and included in the confirmation. If HMRC writes to you about a return, forward it on. We’ll translate it or tell you to ignore it.

The records that feed the return are generated by your bookkeeping. If we look after both, the return cycle is smooth. If your bookkeeping is handled elsewhere, we’ll let you know what we need from it.

Fixed Fees, No Surprises

You’ll know what you’re paying before we start. VAT fees depend on the scheme, the frequency of returns, and whether we’re handling the bookkeeping that feeds them. The right number comes from a short conversation rather than a price list.

Ask for a fixed fee for your VAT

A couple of minutes on our online form, and we’ll come back to you with a number.

Who we look after

Newly VAT-registered businesses – registered voluntarily or having just crossed the threshold
Limited companies whose VAT returns are bundled with accounts, bookkeeping, and payroll
Sole traders approaching or above the threshold are weighing up whether voluntary registration makes sense.
Businesses currently doing their own VAT who want someone else to handle it.
Businesses with HMRC queries on past VAT returns – we take over mid-stream when needed.

Why Clients Stay With Us

We’ve been looking after businesses since Stacey McVeighty FCCA founded the practice in 2014. Today, we work with around 800 clients from our York office. We’re ACCA-accredited, and we hold 39 five-star reviews on Google, most from clients who’ve been with us for years.

Fixed fees. Plain English. The same team next year, and the year after that.

Everything you need from an accountant....it's like having your own accountant in house. Stacey and the team are always available and nothing is too much trouble.

John Heslop
6 years ago via Google

Frequently Asked Questions

What is the current VAT registration threshold?

The threshold is published by HMRC, and we link through to the source rather than repeat a number here that could be out of date. A Budget can change it; we’ll update this page accordingly. If you want to know the current figure and whether you’re close to it, get in touch – a five-minute conversation will give you the answer.

I’ve just realised I should have been registered months ago. What happens?

HMRC will charge VAT on all sales you should have been accounting for from the date you were obliged to register – and you’ll owe that VAT whether you collected it from your customers or not. The sooner you act, the cleaner the position. We’ve handled voluntary disclosures in exactly this situation. Drop us a message, and we’ll talk you through your options.

What is a partial exemption?

If your business makes both taxable and exempt supplies (for example, Independent Financial Advisors, or clinical psychologists), you can only reclaim the VAT on costs that relate to your taxable activities. The partial exemption rules are detailed and easy to get wrong. If your business has any exempt income, tell us when we start.

Can you help if HMRC has opened a VAT compliance check?

Yes. We handle correspondence, gather the records HMRC needs, and deal directly with the officer. Most VAT compliance checks are resolved without penalty if the records are in order and the responses are prompt. If there’s something more serious – an underpayment, an incorrect scheme, an input tax reclaim HMRC is querying – we’ll tell you straight what the position is and what it means financially.

Can I switch to you partway through a VAT year?

Yes. We pick up from where your previous accountant left off, obtain the necessary records, and take over the next return. Most switches happen at the end of a VAT quarter, but we can do it at any point.