Step by step guidance for preparing your business VAT return:
Value added tax is a consumption tax that is charged on the sale of goods or services. The standard rate of VAT is 20%.
Output VAT is the amount of tax charged to customers on your sale of goods or services.
Input VAT is the amount of tax that the business has paid to other suppliers on purchases.
The difference between output VAT and input VAT is either paid by the business to HMRC or is claimed as repayment.
You must register your business for VAT If business’ VAT taxable supplies will exceed £83,000 in the next 12 months. VAT returns are usually prepared on a quarterly basis.
How Many schemes of VAT?
Business can opt for one of the following three schemes to prepare the vat returns:
- 1. Annual accounting scheme:
To qualify for this scheme, your estimated VAT taxable turnover must not exceed £1.35 million in the next 12 months. In annual accounting, scheme business will have to make advance payments towards VAT liability based on previous year VAT return. At the end of the tax year, final balancing payment needs to be made if VAT is still outstanding.
- 2. Cash accounting scheme:
In cash accounting scheme, VAT is paid by cash received or paid. To join this scheme, your Vat taxable turnover must be £1.35 million or less in the next 12 month.
- 3. Flat Rate Scheme:
Within VAT flat rate scheme, fixed rate of VAT is paid to HMRC.Rate of VAT depends on the principle activity of the business. When you registered under flat rate scheme, input VAT can’t be reclaimed on expenses unless you buy a capital asset of more than £2,000. To apply this scheme, your total VAT turnover must not exceed £150,000.
Does there are any Record keeping requirements?
If your business is VAT registered, you must:
- Keep a record of all VAT transactions.
- Keep a Separate account showing summary of VAT
- Issue a valid VAT invoice
Valid VAT invoice:
- Must be issued in the name of the company
- VAT invoice must show the invoice date and amount of VAT charged
- VAT registration number of the seller must be shown on the invoice.
Pro-forma invoices, delivery notes, confirmation orders and statements would not be considered valid for reclaiming the VAT on purchases.
You must keep records for at least six years. All invoices should be accurate and readable.
VAT returns can be prepared manually or by using online software.
How can I Submit VAT returns:
You must submit your VAT return online.
For submitting VAT return online, you need a VAT number and a VAT online account.
What are the Deadlines?
Online VAT account will assist you by telling when your VAT returns and payments will be due to HMRC.
Are you interested in both of the business careers but doesn’t know which of the options is perfect for you? You are not alone. Many people find it difficult to pick a degree program from the overwhelming list of business alternatives. However, there are numerous factors that you need to consider before settling for a particular career.
To help you make a choice between the two, we have presented a side-by-side comparison between banking and sales and accounting. Regardless of whether you are considering majoring on the creative side if banking and sales or analytical accounting, you are in the right place.
Banking and sales vs. Accounting
Before you can pick any degree as a major, it is essential to consider your passion, job outlook, duration of the study, and earning potential. To perform at your best level, you need to be passionate about what you do. Also, you need a job with a pleasant outlook.
Banking and sales entail introducing and promoting products and services to customers and other businesses. Like marketing, you will be required to use both traditional and digital platforms to promote company products.
On the other hand, accounting involves budgeting money and other company assets. If you pursue a career in accounting, you will be able to manage investment portfolios, analyze financial markets and current trends, and have a deeper understanding of how to manage debt.
Common Job Titles
The most common job titles for banking and sales professionals include:
Sales manager; tasked with creating marketing strategies for the company, promoting business’ products and services, describe product features and help with determining product/service pricing.
Sales representative; he/she is responsible for identifying and following up new leads, explain product features to current and potential customers, and build and sustain a vibrant customer base for the company. Other familiar titles include outside/inside sales representative, sales consultant, teller, and collection agent.
Common accounting job titles include:
Accountant; responsible for keeping company records comprising profits, taxes, assets, and liabilities, analyze company financial reports and statements and organize tax returns. Other popular job titles include accounting clerk, chief financial officer, auditor, financial controller, or financial analyst.
Skills required by employers
While a career in banking or accounting may seem lucrative, they are not for everyone. Either of them requires specific industry skills for one to succeed. However, there are some common skills that employers are looking for before absorbing banking and sales or accounting professionals. In-demand skills for banking and sales professionals include sales, marketing, social media management, business development, market research and strategy, and customer service. For accounting experts, most employers are looking for accounting knowledge, financial analysis and reporting, business administration, GAAP, general ledger, forecasting, and account reconciliation.
Bottom line, both careers require a Bachelor’s degree as the minimum level of education. Therefore, while making up your mind on the best alternative for you, remember that education plays a critical role for a career in either banking and sales or accounting.
From the above comparison, you can now look into your strengths, weaknesses, and personal preferences to make the final decision. No need to rush. Take as much time to arrive at an informed choice.
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