Tony Nickson, our VAT Consultant, answers your most frequently asked questions.
Tony Nickson has joined Hawsons with over 20 years of experience from HMRC
Any questions you need answered?
When Do I Have to Register for VAT?
I’m not sure when I need to register for VAT, what help can you give me regarding thresholds?
You must register for VAT if your taxable turnover is more than £85,000. However, it may be in your interest to register for VAT if you do not reach this threshold. There are other limits/threshold to be aware of, so please contact Hawsons who will advise on all matters to do with VAT registration.
You must register within 30 days of your business turnover exceeding the threshold. If you register late, you must pay what you owe from when you should have registered.
Rates depend on conditions such as:
- who’s providing or buying the goods / services
- where they’re provided
- how they’re presented for sale
- the precise nature of the goods or services
- whether you obtain the necessary evidence
- whether you keep the right records
- whether they’re provided with other goods and services
What VAT Rates Are There?
What VAT rates do I need to pay? Can I be exempt from VAT?
Standard – 20%; Reduced – 5%; Zero – 0%. Some goods/services may be exempt from VAT or outside the scope of VAT. Here at Hawsons, we can help out clients with the VAT liability of their supplies.
My customer has not paid for a supply of goods, and I can't pay my VAT bill.
How can I claim Bad Debt Relief (BDR)?
If your customer has not paid for a supply of goods or services you may be able to claim BDR. Hawsons can help you meet the conditions for claiming BDR.
Bad Debt Relief (BDR)
Various records and evidence must be kept (for four years from the date of claim), in particular to identify:
- The time and nature of the supply, the purchaser, and the consideration
- The amount of VAT chargeable on the supply
- The accounting period when this VAT was accounted for and paid to HMRC
- Any payment received for the supply
- Entries in the refund for bad debts account
- The accounting period in which the claim is made.