A walk in the park

Business accounting for non-accountants

All news » VAT – Nil return

VAT – Nil return

A colleague at a business networking group asked me recently, ‘I have received a vat return form but I have not started trading yet, what shall I do?’

Usually, once you have registered for VAT, doing nothing is not an option anymore. The forms need to be submitted even if with the zero values. Here is a link to HMRC website on the issue: http://bit.ly/iaBUzy

Most businessmen first start trading in some capacity and then think about registering themselves for VAT. However, there is nothing wrong in getting VAT registered early especially if you think you will be spending money on buying equipment and other materials. In fact thinking about VAT early could be really useful as rules are very complicated and depending on the nature of your client and your supplies VAT can have a significant effect on your business. For example, if you provide services to charity organisations it may be best not to get VAT registered if your turnover is below the threshold. Most charities cannot reclaim VAT so it’s cheaper for them to buy services from non-VAT suppliers.

Tagged in: Uncategorized