Bishop Fleming Chartered Accountants
VAT

VAT
The VAT system is policed by HMRC with heavy penalties for breaches of the legislation. Ignorance is not an acceptable excuse for not complying with the rules. We highlight below some of the areas that you need to consider.

VAT - Annual Accounting Scheme
HMRC have introduced a number of VAT schemes over the
years designed to reduce the administrative burden on small
businesses. One such scheme is the annual accounting
scheme.

VAT - Cash Accounting
Cash accounting enables a business to account for and pay
VAT on the basis of cash received and paid rather than on
the basis of invoices issued and received.

VAT - Flat Rate Scheme
The flat rate scheme for small businesses was introduced to reduce the administrative burden imposed when operating VAT. Under the scheme a set percentage is applied to the turnover of the business as a one-off calculation instead of having to identify and record the VAT on each sale and purchase you make.

VAT - Bad Debt Relief
It is quite possible within the VAT system for a business to be in the position of having to pay over VAT to HMRC while not having received payment from their customer. Bad debt relief allows businesses that have made supplies on which they have accounted for and paid VAT but for which they have not received payment to claim a refund of the VAT by reference to the outstanding amount.