If you have never had to pay VAT before and you have recently registered – or you are just about to – then you should make sure you start off in just the right way.
You need to submit your VAT return once every three months, which is a lot more often than you will be used to doing your normal tax return! This means that if you are not prepared for it, you could end up getting in a real knot.
The best bet for starters is to take a long look at your current method of keeping records and completing your accounts to do your annual tax return. Some people keep everything meticulously up to date. This means that by the time April comes around and they get a reminder that they now need to submit their return, they are all set to do so.
Other people meanwhile put everything in a carrier bag – receipts, records and all the other paperwork their business generates – and give it to their accountant for them to sort out. Needless to say this second method results in a far larger bill from the accountant to pay!
But you don’t have the luxury of waiting a whole year before you have to sort out your VAT return. Every three months means that every twelve weeks you need to be getting up to date and sending off the required paperwork. And they won’t look kindly on you if you are late.
So – make sure you know what information you need to be writing down and start afresh. Can you adjust the accounts you are keeping now? Perhaps you already knew you would need to pay VAT very soon, and so you made the necessary adjustments before that time came.
If you are at all unsure about what you need to be writing down, and what you need to be keeping, make sure you book an appointment to see your accountant. They will know exactly what needs to be done and you can make sure that you don’t forget to do anything.
In addition to this, if you find the thought of doing your VAT return yourself, you can get your accountant to do it all for you, just as you do with your regular tax return each year. You might find it worthwhile to do this, but you should consider the situation carefully before you make your final decision. For example, do you find paperwork and figures tricky and you are not 100% sure of what you need to do? If so, the money you pay your accountant to complete your VAT return for you will be money well spent. You will avoid the worry and the headache of doing it alone every three months.
As you can see, a little bit of forward thinking really does pay off in this situation. All you need to do is make sure everything is set up correctly to start with, and you can then ensure your VAT return is completed with the least amount of hassle each and every time.