VAT is a consumption tax charged on the sale of goods and services. Businesses registered for VAT must:
Charge VAT on their taxable sales (output VAT)
Reclaim VAT on eligible business purchases (input VAT)
Pay the difference to HMRC, or claim a refund
VAT is ultimately paid by the end consumer, but businesses are responsible for administering it accurately.
Standard rate: 20%
Reduced rate: 5% (e.g. domestic fuel, some renovations)
Zero rate: 0% (e.g. most food, children’s clothing)
Exempt: No VAT charged or reclaimed (e.g. insurance, education)
Correctly categorising supplies is essential, as mistakes often trigger HMRC enquiries.
You must register for VAT if:
Your taxable turnover exceeds the VAT registration threshold in a 12-month period
You expect to exceed the threshold in the next 30 days alone
You may also choose to register voluntarily, even if below the threshold.
Standard VAT Accounting
Flat Rate Scheme
Cash Accounting Scheme
Annual Accounting Scheme
Margin Schemes (specific sectors)
Each scheme has strict eligibility rules and different impacts on:
VAT payable
Cash flow
Reporting complexity
We assess your business model to determine the most tax-efficient option.
Most VAT-registered businesses must submit quarterly VAT returns digitally under Making Tax Digital (MTD).
A VAT return summarises:
VAT charged to customers
VAT paid on purchases
VAT owed or reclaimable
Claiming VAT on disallowed expenses
Incorrect VAT rates
Missing EU or international rules
Poor record-keeping
Spreadsheet-based errors under MTD
Accurate bookkeeping and professional review significantly reduce the risk of HMRC penalties.
Making Tax Digital is now mandatory for all VAT-registered businesses.
This means:
VAT records must be kept digitally
Returns must be submitted using MTD-compatible software
Manual submissions via HMRC portal are no longer permitted
We help businesses:
Transition to compliant software
Set up digital links correctly
Avoid penalties during HMRC reviews
HMRC can inspect VAT records at any time. Triggers include:
Repeated errors
Large VAT reclaims
Late submissions
Industry-wide checks
Penalties may apply for:
Late VAT returns
Late VAT payments
Careless or deliberate errors
Having an accountant manage your VAT significantly reduces exposure and ensures you are fully prepared for any HMRC contact.
VAT becomes more complex when trading internationally.
This includes:
Import VAT
Export zero-rating
EU VAT rules
Reverse charge mechanisms
Distance selling thresholds
Incorrect treatment of overseas transactions is one of the most common causes of VAT assessments. Specialist advice is essential for businesses buying or selling outside the UK.
We provide end-to-end VAT support for SMEs, including:
VAT registration and deregistration
VAT scheme selection and reviews
VAT return preparation and submission
MTD compliance and software setup
HMRC correspondence and enquiries
VAT planning and cash-flow optimisation
Our approach is proactive, not reactive — ensuring problems are avoided before they arise.
VAT mistakes are expensive. Overpayments, missed reliefs, and penalties quickly outweigh the cost of professional advice.
By outsourcing VAT to experienced accountants, you gain:
Confidence in compliance
Improved cash flow
Reduced HMRC risk
Time to focus on running your business
If you are unsure about VAT registration, struggling with returns, or want reassurance that everything is being handled correctly, we are here to help.
Contact us today for expert VAT advice tailored to your business.