Business clients
Do I need to be VAT registered?
You need to become VAT registered when your sales are over £73,000 for the last 12 months. However you can take the decision to become VAT registered before that point if you feel it would be beneficial to you. When you become VAT registered, you have to charge VAT on all sales (now at 20%) but it also means you can claim back the VAT on products and services you purchase.
It could therefore be beneficial for you to register for VAT if the majority of your customers are VAT registered businesses as they can claim VAT back from you and you can claim VAT back on your purchases. If, however, you are focused on a consumer market, you will have to either increase your prices or absorb the difference in the cost yourself, potentially causing a problem for your bottom line.
For smaller businesses the Flat Rate VAT Scheme may be a useful and financially beneficial alternative to the standard accounting method of calculating your VAT liability.
How do I increase my business profits?
We can carry out a business healthcheck designed to help you identify how to increase the amount of money in your bank account, to strengthen your cashflow and plan for the future. Please call us and we will take you through our "On Track" program.
How can I reduce my tax bill?
There are a number of important ways that you can reduce the amount you have to pay each January. Some you must bear in mind throughout the year, and others only apply when you come to actually pay your bill.
- Allowable Expenses
These expenses cover the day-to-day running of your business, and might include things like phone and other utility bills, professional fees like those charged by accountants and lawyers, stationery and postage.
When you are completing your Self Assessment, your total allowable expenses are deducted from your income – but, of course, you can only claim for expenditure for which you have kept accurate records. Efficient accounting is therefore the most effective way for most Self Assessment taxpayers to keep their bills down. - Offset losses
You can also reduce your Self Assessment tax bill by offsetting business losses. Many small business owners who do not break even for their first couple of years can use these trading losses in a number of ways. We can advise you in this matter. - Pay on time
Most people file their tax return on time. Make sure you are one of them by filing your 2010/11 Self Assessment Return on time to avoid the new penalties. The new penalty regime for late filing and late payment of Income Tax through Self Assessment starts in April 2011. The new penalty framework will significantly increase penalties for those who file and pay late after 31st January filing deadline. A tax return filed six months late could attract a penalty of at least £1,300.
