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Expert VAT & Making Tax Digital Services

Digital Tax

Understanding VAT & Making Tax Digital

Value Added Tax (VAT) is a consumption tax levied on most goods and services in the UK supply chain. Businesses act as tax collectors for HMRC, accounting for the difference between VAT charged to customers (output tax) and VAT paid to suppliers (input tax).

Making Tax Digital (MTD): Since April 2019, VAT-registered businesses with taxable turnover above £85,000 must maintain digital records and submit returns using MTD-compatible software. This initiative aims to reduce errors and streamline tax administration.

Our certified professionals use approved accounting platforms like Xero and QuickBooks to ensure your business meets all MTD obligations while maximizing VAT recovery opportunities.

VAT Registration Guidance

We help businesses navigate the VAT registration process with confidence

When Registration is Required

You must register for VAT if your taxable turnover exceeds £85,000 in any 12-month period or if you expect to surpass this threshold within the next 30 days. Voluntary registration may be beneficial even below this threshold if you:

  • Want to reclaim VAT on startup costs
  • Seek to enhance business credibility
  • Supply mainly to VAT-registered businesses
  • Anticipate rapid growth

Our Registration Process

1
Threshold Assessment

We analyze your turnover history and projections to determine registration requirements.

2
Scheme Selection

We recommend the optimal VAT scheme based on your business model and cash flow needs.

3
HMRC Registration

We handle all paperwork and digital submissions to HMRC on your behalf.

VAT Scheme Options

Choosing the right scheme can significantly impact your cash flow and administrative burden

Standard VAT Scheme

Submit quarterly returns detailing all transactions. Best for established businesses with consistent cash flow.

Flat Rate Scheme

Pay a fixed percentage of turnover with simplified record-keeping. Ideal for small businesses with limited VAT reclaims.

Cash Accounting

Account for VAT when payments are made/received rather than on invoices. Helps with cash flow management.

Annual Accounting

Submit one annual return with advance payments. Reduces administrative workload significantly.

Margin Schemes

For second-hand goods, antiques, art - VAT paid only on the profit margin rather than full selling price.

Retail Schemes

Simplified methods for retailers who make numerous low-value sales to the public.

One Stop Shop (OSS)

For eCommerce businesses selling digital services or goods to EU consumers post-Brexit.

Specialist Schemes

Including tour operators, gold, and investment gold schemes for specific industries.

Unsure which scheme is right for your business? Our VAT specialists can assess your situation and recommend the optimal approach.

Get Scheme Advice

Our VAT & MTD Services

Comprehensive solutions to meet all your VAT obligations

MTD Compliance

Full implementation of Making Tax Digital requirements including software setup, digital record keeping, and API submissions.

VAT Return Preparation

Accurate calculation and submission of your quarterly VAT returns with comprehensive review of all transactions.

VAT Health Check

Comprehensive review of your current VAT position to identify potential savings and compliance risks.

VAT Cash Flow Planning

Strategic advice to manage VAT payments and optimize your working capital position.

HMRC Investigations

Expert representation and support if HMRC questions your VAT returns or compliance.

International VAT

Guidance on cross-border transactions, EU VAT rules, and global compliance requirements.

Our Services

We take into account that every business is particular, that is why we provide bespoke accounting applications designed to fulfill your unique requirements. Our services encompass:

Bookkeeping & Accounting

Accurate bookkeeping and transaction management, including bank reconciliations and management accounts. We provide clear and actionable financial reporting to keep you in control.

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VAT Services

VAT registration and advisory, including accurate return preparation and filing with HMRC. We ensure full compliance while minimizing errors and maximizing efficiency.

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Statutory Accounts & Corporation Tax

Preparation of statutory accounts for Companies House and CT600 return filing. We offer expert advice on allowable expenses and strategic tax planning opportunities.

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Payroll & CIS Management

PAYE payroll processing for your staff, including statutory deductions like SSP, SMP, and NICs. We also manage full Construction Industry Scheme (CIS) compliance.

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Personal Tax & Capital Gains

Self-assessment tax returns for individuals and capital gains tax planning for property and investments. We advise on applicable reliefs and tax optimization strategies.

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Property Investment Accounting

Specialized accounting for buy-to-let portfolios and property companies. We manage mortgage interest and expenses while planning for maximum investment returns.

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VAT & MTD FAQs

Answers to common questions about VAT compliance

When is VAT registration required?
Registration becomes mandatory when your taxable turnover exceeds £85,000 in any rolling 12-month period, or if you expect to surpass this threshold within the next 30 days. The threshold applies to taxable supplies, not exempt or out-of-scope transactions. Some businesses choose to register voluntarily below the threshold to reclaim input tax or enhance credibility.
What are the penalties for late VAT returns?
HMRC operates a points-based penalty system for late submissions. Each late return earns 1 point until reaching the penalty threshold (4 points for annual filers, 5 for quarterly, 2 for monthly). Exceeding the threshold triggers a £200 penalty plus £200 for each subsequent late submission. Late payments incur separate penalties of 2% of unpaid tax if 15 days late, another 2% at 30 days, then daily penalties after 30 days plus interest.
How can you help with VAT compliance?
Our comprehensive service includes: MTD software setup, digital record keeping, VAT return preparation and submission, payment reminders, ongoing scheme reviews, and regular compliance checks. We act as your outsourced VAT department, ensuring you meet all obligations while optimizing your VAT position. Clients benefit from our specialist knowledge of complex areas like partial exemption, capital goods scheme, and cross-border transactions.
What VAT schemes are available?
Beyond the Standard scheme, options include: Flat Rate Scheme (fixed percentage of turnover), Cash Accounting (VAT on payments not invoices), Annual Accounting (one return per year), Retail Schemes (for shops), Margin Schemes (second-hand goods), and various industry-specific schemes. The optimal choice depends on your business size, sector, customer base, and cash flow requirements. We provide detailed comparisons to help you select the most beneficial approach.
Do you support businesses during HMRC investigations?
Yes, we provide full representation during VAT inspections and enquiries. Our specialists handle all communication with HMRC, prepare necessary documentation, and ensure your rights are protected. We've successfully resolved hundreds of cases ranging from simple queries to complex disputes. Prevention is key - our rigorous review process minimizes investigation risks, but if HMRC do raise questions, you'll have expert support every step of the way.
What's involved in Making Tax Digital for VAT?
MTD requires VAT-registered businesses to: 1) Keep digital records using approved software, 2) File returns through API-enabled platforms (not the HMRC portal), and 3) Maintain digital links between systems (no manual data transfer). We implement compliant solutions tailored to your business size and complexity, from basic bridging software for simple businesses to full accounting platforms with automated bank feeds for larger operations.

Ready to Get Started?

At Etax Online Accountants, we go beyond the numbers. Our mission is to simplify your financial processes and empower your business to grow with confidence. Whether you're a startup, a growing SME, or an established enterprise, we offer tailored accounting, tax planning, and financial advisory services that align with your goals.

Call Us: +44 7575 84 4735

Etax

Etax Online Accountants provides reliable tax solutions for individuals and businesses.

Address

123 Street, New York, USA

+44 7575 84 47350

Info@etaxonline.co.uk

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