Many businesses do their own VAT returns, but this takes a lot of time. That time could be spent doing other things, which is why you should claim everything you can. You also want to reduce your chances of making an error. With that said, if you want to make things more efficient, then keep these tips in mind:
Claim VAT On Mileage
Those who run limited companies can and should claim mileage. This allows them to cover their expenses in regards to putting miles on their vehicles. Generally speaking, they can claim around 25 Pence per mile.
VAT can sometimes be claimed on the fuel element on mileage claims, but what you can claim depends on the advisory fuel rates set forth by the HM Revenue & Customs. What you want to do is find the fuel rate per mile and then times that by the miles you have done, and then you apply 1/16 to the VAT. This will tell you how much you will be able to claim.
We Can Help Select The Right VAT Scheme
There are various VAT schemes companies can use. It really depends on what industry you are in. For example, you might benefit from the VAT flat scheme.
The flat scheme allows the VAT to be calculated based on your gross sales. You will be charged a certain percentage of those sales, and you might be able to pay less in taxes when you use this method. This is why many business choose the flat rate scheme over the standard method.
Claim VAT On Bad Debts
If you have a customer who has outstanding debt with you and that debt is older than six months, the chances are you won’t be paid, which means you can reclaim sales VAT from such sales. Always make sure you know who owes you money and how much because you don’t want to leave money on the table. VAT has a cash account scheme, so take advantage of this.
It allows you to only include VAT from sales when customers have actually paid you for your products or services. Here are some more things you can reclaim VAT on according to VATIT
Have A different Bank Account Specifically For VAT
VAT is collected by business owners, and it’s supposed to be sent to HM Revenue & Customs. This is why you need to properly manage your cash flow and do not spend it, regardless of what your situation is. Think of this cash as not being there and cash that has to be paid to the HM Revenue & Customs on a quarterly basis.
You can avoid falling into the trap of spending the money. Simply open a different bank account and put your VAT in it whenever it is paid to you. Before you know it, you’ll have a smooth running system.
Invest In Software
Use good account software to help you. Software can be used to make records of invoices and it will reduce your chances of making errors when the time comes to file VAT. There are many software products out there.
Plus, software makes it easier for accountants to do VAT, but it also makes it easier for business owners. With that said, check out cloud-based services. Otherwise, you should check out Kashflow, Xero or FreeAgent, as these are all good software options you can try. If none of them appeal to you, then compare other software products.