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Making a VAT mistake may cost you

Home / Blog Entry / Making a VAT mistake may cost you

For more than three decades our firm has been assisting clients with all their accounting needs. As a result, we have become the foremost company working in VAT returns Camden has. We make sure that every personal and business client receives a service that is unbeatable in terms of quality and cost.

Looking at VAT

The VAT laws are complex to say the least. Knowing this, it is understandable that there will be companies that make mistakes on their return forms. Unfortunately, these errors can become rather expensive issues. We mean this in relation to both triggering a VAT investigation and paying the incorrect amount. To ensure you get your VAT returns correct the first time, you need to know what the most common mistakes are.

Under-stating the turnover

One such mistake is under-stating the Flat Rate turnover. Usually, when income becomes exempt from VAT, it means precisely that. As a result, you don’t put it on your return. Yet, here lies one of the Flat Rate Scheme’s quirks. The gross income you put into Box 6 of your return needs to include the value of every exempt supply. This is in addition to VAT-inclusive value of each zero-rated, reduced-rated, and standard-rated supply. Therefore, in certain instances, you could find yourself paying extra VAT under the Flat Rate Scheme.

Exceeding the expiry date

VAT returns CamdenThe next mistake we will discuss is utilising the 1% reduction past its expiry date. When you initially join the Flat Rate Scheme, you receive a 1% deduction off your industry percentage. The reduction does not run out on the anniversary of you joining the scheme but of your VAT registration. Depending on your chosen bookkeeping software, it is possible for this to get flagged up. If this does not happen, be especially careful.

VAT inquiries are doing a better job of noticing this mistake these days. As a consequence, you will likely find you need to pay to backdate the VAT. If you need help from the most skilful teams specialising in VAT returns Camden has, please speak to us.

VAT for vehicles and fuel

Another common error is falsely claiming for VAT on motor vehicles and fuel. People do this for cars they use in their private time. It is only possible to reclaim the VAT when you exclusively use the vehicle for business reasons. It can’t be available for anyone to use privately. A similar mistake would be claiming the entire costs of the fuel where you have made a car available for unrestricted private use. People also claim without charging a corresponding VAT. This comes in the form of a fuel scale charge.

The highest standards for VAT returns in Camden

At Brian G. Lonis & Co, we tailor our solutions to your unique needs. In order to understand these needs, we get to know as much as we can about you or your business. As an FFA and FCCA qualified company, we are also fully capable of meeting the highest standards.

So, if you would like to work with the leading establishment specialising in VAT returns Camden has, feel free to contact our team.