VAT

PA Group Accountants are specialising in helping small-to-medium-sized businesses,contractors, and sole traders. We’ll help you choose the right VAT scheme for your business, and make sure you understand and comply with VAT regulations.

The standard rate is the most commonly used scheme suited to a range of businesses across several industries. With standard VAT accounting, the business will be reclaim VAT that may have had to pay on the purchases. The VAT registration is mandatory for the businesses that have a taxable income, expected income or import goods from the EU that exceed the value of £85,000 per annum.

• The standard rate scheme allows businesses to reclaim the VAT that they have paid on services and goods from their suppliers.
• The VAT registered businesses that sell zero-rated services or items such as food,children’s clothing can be eligible for VAT refunds.
• Once the business is VAT registered, then this can make trade more appealing to clients and other companies.

The contractors, sole-trader often use the flat rate scheme. In accordance with recent changes to the flat scheme, only ‘limited cost traders’ with goods purchases of less than £250 per quarter or less than 2% of their taxable income are eligible. The limited cost trading business will pay a flat rate of 16.5% of their VAT inclusive income to HMRC.

• Administration of the flat rate VAT is very straightforward. This can be suited well to the small businesses because it makes it much quicker and simpler to account for VAT.
• Businesses with low input VAT can make an additional profit from registering for the flat rate scheme.