VAT & BOOK-KEEPING

There may also be circumstances where it’s beneficial for a business to be VAT registered, despite having a turnover lower than the £85,000 threshold. If this is the case for your business, we will be able to advise you further and weigh up all the pros and cons. There are various VAT schemes available, so we will find the right one for you and handle the VAT registration process.

 

Value-added tax, or VAT, is added to the cost of nearly everything we buy in the UK. If your business turnover is over the £85,000 threshold, you will most likely need to be VAT registered. You would then start adding VAT to your applicable products and services. It’s currently charged at 20% on most products and services.

VAT is payable on:

·         The sale of goods or services

·         Hiring or loaning goods

·         Selling business assets

·         Commission

·         Selling to staff

·         Goods that aren’t used solely for business

·         Gifts

Bookkeeping is the process of keeping business financial records, with the purpose of showing cashflow, profit, loss, and other essential data. From this, businesses can also work out how much they owe in tax and keep on top of other bills to pay.

 

Bookkeeping is important because:

·         It allows you to track income and outgoings, which is essential for accurate tax calculations.

·         You’ll know if you need to register for value-added tax (VAT). It’s important to see your VAT taxable turnover, so you know if you need to register.

·         It’s essential when preparing management accounts accurately. This will give you key financial information when making decisions about your business.

Too many small businesses still do their books manually…

Here are 5 reasons (in no particular order), why businesses should use up to date cloud-based accounting/ bookkeeping software…

  • Ease

    Software now is incredibly user friendly and it’s far quicker to enter information into a system like Xero or QuickBooks, than create manual invoices and keep receipts in bags or boxes to be reconciled at a later date. In short it will make your life easier!

  • Real time knowledge

    Kept up to date, cloud-based software provides real time information, helps you to predict tax bills as well as manage cash-flow more easily.

  • Get paid easier

    The software will help you improve credit control, by sending automatic reminders to customers with outstanding bills.

  • Always be in the 'know'

    By using the reports available within the system, you will be able to accurately monitor the health of your business in real time.

  • Access

    You can work from anywhere with an internet connection, share information with your staff (wherever they may be) and collaborate remotely with your accountants.