Most businesses can set up a Direct Debit payment through their VAT online account.
Do note that Direct Debit payments take at least three working days to clear. As such, you should set up the Direct Debit at least three working days before submitting your online VAT return, or the payment won't be processed in time.
And if you've signed up for Making Tax Digital (MTD) for VAT and require more than one signature to set up a Direct Debit, you should use the Making Tax Digital VATC9 form. If you only require one signature to set up a Direct Debit, you can do so through your VAT online account.
The Making Tax Digital VATC9 form should also be used if if you've previously signed up for Making Tax Digital for VAT and have opted out of using the service.
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What are the advantages vs disadvantages of VAT registration?
The advantages of VAT registration are:
- It enhances the perception of your business: Registering for VAT tends to lend credibility to your business, and makes your company appear larger and more established.
- You can reclaim VAT: You can reclaim VAT on goods and services you've purchased from other businesses, and this can be advantageous in certain situations.
The drawbacks of VAT registration are:
- Administrative burden. As a VAT-registered business, there are VAT rules and record keeping requirements you'll need to comply with.
- It makes your goods or services seem more expensive. Charging VAT can make your goods and services more expensive-and therefore less appealing, particularly if your customers or clients are not VAT-registered business, or are end consumers who aren't able to reclaim VAT.
- You may be faced with an unexpected VAT bill. If your output VAT is higher than the input VAT, as it nearly always will be, then you need to pay the difference to HMRC. This can create cash flow issues if you're unprepared for an unexpected VAT bill.
How to calculate holiday pay for overtime and commission payments
"What are the rules around holiday pay?" is a common question often asked by employers.
It can be confusing, as regulatory changes mean that employers now need to consider additional elements when working out an employee's holiday pay.
Simply put, employers now need to include regular commission and regular overtime payments when calculating an employee's or worker's holiday pay.
This is explained in further detail below:
How do I pay myself as a contractor?
A contractor working through their own limited company can pay themselves through a couple of ways such as paying a salary and paying dividends. There are a few factors that need to be considered when deciding the best way to go about this.
For example, when operating inside IR35, contractors will be restricted to paying themselves a salary however when operating outside IR35 the doors are opened to maximise tax efficiencies.
How do I pay myself dividends?
To pay a dividend, you need to:
- Hold a directors' meeting to ‚Äòdeclare' the dividend.
- Keep minutes of the meeting, even if you're the only director. For smaller companies, this may often be just a case of getting the paperwork completed.
- Issue dividend vouchers.
How do I register for flat rate VAT?
You'll first need to check that you're eligible for the VAT Flat Rate Scheme.
- By email to firstname.lastname@example.org
- By post to:
HM Revenue and Customs
You'll receive notification that you've joined the scheme through your VAT online account, or by post if you did not apply online.
When do I have to pay National Insurance?
For employers, the deadline for paying National Insurance will vary depending on the amount payable.
If the amount payable exceeds £1,500, the deadline will fall on the 22nd of the month (or the 19th if payment is made by post).
If the amount payable falls below £1,500, you can make quarterly payments instead of monthly ones. The quarters end on 5 July, 5 October, 5 January and 5 April, and payments are due on the 22nd of the month (or 19th is payment is made by post). For example, for the quarter ending 5 July, the payment must be made by 22 July.
Working out the VAT
With our calculator, you can work out your VAT in just a few quick clicks.
If the price doesn't include VAT:
- Select the ‚ÄòAdd VAT' option
- Select the rate of VAT on the slider
- You'll obtain the gross price (inclusive of VAT) and the VAT element of the bill.
If the price includes VAT:
- Select the ‚ÄòExclude VAT' option
- Select the rate of VAT on the slider
- You'll obtain the pre-VAT price (exclusive of VAT) and the VAT element of the bill.
VAT basics: What you need to know
VAT, or Value Added Tax is a consumption tax that is applied to most goods and services. While the standard rate (20%) applies in most cases, there are items-such as children's car seats and sanitary products-that are charged at the reduced rate of 5%. Using the slider on our calculator, you'll be able to calculate the VAT and gross or net prices for different VAT rates. If you're unsure about the correct rate you should apply, refer to HMRC's resource on VAT rates.
- How to deal with VAT if you are a small business
- Flat rate VAT Scheme: A beginner's guide for small business owners
7 ways to improve your monthly cash flow
Healthy cash flow is one of the most powerful weapons in a small company's arsenal.
In fact, cash on hand can be the deciding factor in a customer's choice to buy from your company or a competitor.
For instance, imagine landing the large order of your dreams, but losing the business to a competitor because you lack the capital necessary to prepay for the products needed to fill the customer's order. Fortunately, you can avoid this pitfall by making a few simple changes in your operations.
Below is a look at seven ways to grow your monthly cash flow by reducing expenses.
What is a directors loan account?
As a limited company director, you can access the money in your company bank account through a facility known as a director's loan.
This can come in handy in instances when your personal finances are in need of a boost, yet taking out a director's loan is a decision that requires careful consideration. That's because there are tax and accounting implications, and it's best to speak to an accountant so that you fully understand the consequences.
But before you dive into the details, you'll need to have an understanding of the basics-such as what a director's loan account is, what the loan can be used for, tax rules you need to be aware of and more.
Here's where our guide comes in:
How should I pay overseas supplier?
To pay an overseas supplier, you need to:
- Decide on a payment currency
- Select a payment method: There are various payment methods and payment service providers available, including bank transfers, credit card payments, PayPal and TransferWise. When you're choosing a payment method or provider, you need to think about the currencies available, fees, exchange rates, speed of international transfers and payment reconciliation capabilities.
- Obtain the information you need to process the payment: You may need to obtain different types of information from your supplier, depending on the payment method you agree on. These may include their full name and address, bank account number, routing number and branch number and address.
What is a Director's Salary?
As a limited company director, you pay yourself through drawing a salary and receiving dividends from your company.
Drawing a salary from your company is fairly similar to how you'll be paid if you were employed elsewhere-you'll run payroll, submit the required information to HMRC each month and receive your salary (after income tax and NIC have been accounted for).
How do I register for standard rate VAT?
There are certain instances where you must register by post. You should use the form VAT1 if you want to apply for a ‚Äòregistration exception', are joining the Agricultural Flat Rate Scheme or if you're registering the divisions or business units of a body corporate under separate VAT numbers.
Refer to the HMRC website for information on when you need to register by post using the form VAT1A, VAT1B or VAT1C.
What are the VAT rates for different goods and services?
There are three VAT rates: standard rate (20%), reduced rate (5%) and zero rate (0%). VAT is not charged for exempt or out of scope items, and the standard rate applies to most goods and services. Refer to HMRC's resource for further information on what VAT you should charge based on the type of goods or services you provide.