Are you tired of feeling overwhelmed by VAT regulations? Do you want to ensure your business is fully compliant and not overpaying on VAT?
Discover when it is time to talk to a VAT accountant or tax adviser through this blog post. Read on to find out more!
UK VAT Accountants and Tax Advisers
As a business owner, you are probably familiar with Value Added Tax (VAT). It is a tax added to the price of most goods and services, and managing this aspect of business compliance can be exhausting.
While it may be possible to handle VAT affairs yourself, there are times when it’s worth talking to an accountant or tax adviser.
But when is the right time to do so? And what exactly do these professionals do? In this blog, we will explore answering these questions and advise when to seek professional help. Keep reading until the end!
What is VAT?
VAT is a tax added to the price of goods and services sold in the UK and most countries worldwide. Essentially, it is a tax added at each stage of the supply chain.
VAT-registered businesses charge this tax on their sales, and they can also claim back VAT on their purchases. The difference between the collected VAT and the claimed VAT on business purchases should be remitted to HM Revenue & Customs (HMRC).
How do accountant firms assist businesses?
Accountant firms can be very beneficial when it comes to dealing with VAT. Some of the benefits of hiring one include help registering for VAT, which you must do if your taxable turnover is over a certain amount (currently £85,000).
They can also help you with VAT returns, which you must submit to HMRC regularly (usually quarterly).
In addition, VAT schemes exist to help simplify compliance for certain types of businesses, such as the Flat Rate and Cash Accounting scheme, but they’re not always the best option. An accountant can help you decide which method is suitable for your business.
Difference between VAT Accountant Firms and Tax Advisers
Although tax advisers have a similar role as accounting firms, their focus is much broader. While accountants generally focus on preparing financial statements and tax returns, tax advisers advise on tax planning and strategy.
They can help you minimize your tax liability, ensure you comply with tax regulations, and deal with HMRC inquiries.
When do you need to talk to an accountant or tax adviser?
As your business grows, applicable VAT rules can become more complex. This is when it may be worth talking to an accountant or tax adviser. Here are some situations where you may want to seek professional advice:
- You’re approaching the VAT registration threshold and need help registering for VAT.
- You’re dealing with business transactions that have a mix of VATable and non-VATable sales
- Your sales have different VAT rates.
- You’re considering joining a VAT scheme, such as the Flat Rate or Cash Accounting Scheme.
- You’re dealing with cross-border sales or purchases, which can be subject to different VAT rules.
- You’re facing an HMRC inquiry or investigation.
When don’t you need to involve an accountant?
In some situations, you don’t necessarily need to involve an accountant. Here are a few examples:
You have a good understanding of VAT regulation
If you have experience with VAT regulations and feel confident in compliance with rules, you may not need to involve an accountant. However, remember that VAT regulations can be complex, and you must be up-to-date with any changes.
You have a basic business structure
If your business typically faces a limited number of transactions, you may not need to involve an accountant. However, if your business is more complex or deals with international transactions, seeking guidance from an accountant or tax adviser may be beneficial.
Best accountant firms in the UK
Many great accounting firms in the UK can help with VAT and other financial matters. Some of these firms include:
PwC is a leading global professional services firm that offers a wide range of business services, focusing on accounting, audit, and tax. It is known for its innovative approach to problem-solving and ability to help clients comply with regulatory bodies and global markets.
Deloitte is a firm that provides similar services, including advanced taxation, audit and assurance, and advisory services.
It focuses on sustainability and social responsibility, and its expertise is more on risk management, digital transformation, and mergers and acquisitions.
EY considers its clients’ business strategy, objectives, and current capabilities in rendering accounting, tax, and business advisory services.
It is a multinational accounting firm known for its commitment to diversity and inclusivity and its focus on driving growth and helping clients achieve their strategic objectives.
Similarly, Grant Thornton is a leading accounting and advisory firm known for its personalized approach to client service and ability to help clients optimize their operations, navigate complex regulatory environments, and achieve sustainable growth.
Sterlinx Global provides comprehensive accounting services to businesses, including accounting, bookkeeping, payroll, tax planning, and consulting. They are primarily experts in e-commerce accounting but also offer services to businesses regardless of company size or style.
Their team of experienced professionals has a deep understanding of UK tax laws and regulations. The firm can provide tailored advice and guidance to help businesses stay compliant and minimize tax liability.
Frequently Asked Questions
How much does hiring an accountant or tax adviser cost?
The fees associated with hiring an accountant or tax adviser may vary, and the amount depends on the complexity of your business and the services you require. Some firms charge an hourly rate, while others offer fixed-fee packages.
You must discuss the fees upfront with the VAT accountant or tax adviser you plan to hire and ensure you understand the services included.
What are some common VAT errors that businesses make?
Examples of these errors are:
(1) failing to get registered for VAT when you are supposed to
(2) charging the wrong VAT rate
(3) bloating your claimable VAT and tax relief,
(4) failing to maintain an accurate and complete set of VAT records.
These errors can result in penalties and interest charges from HMRC.
Can an accountant or tax adviser help me with international VAT?
Yes, if your business trades internationally, an accountant or tax adviser can guide how to navigate VAT regulations in different countries and ensure that your business remains compliant.
Ultimately, whether you need to talk to an accountant or tax adviser about VAT depends on the complexity of your VAT affairs and the size of your business. These professionals can provide guidance on VAT registration, VAT returns, VAT schemes, and other tax matters.
For specific tax guidance for your business, consult us at Sterlinx Global.