VAT

Quarterly VAT returns

VAT is charged by businesses on the goods or services they supply. Not all businesses have to register for VAT, but many need to. The tax is collected by those businesses on behalf of Customs and Excise, the body responsible for enforcing the regulations that govern VAT. VAT can be charged when goods or services are supplied in the UK – including the Isle of Man – by what is known as a taxable person who is conducting a business transaction. In other words, VAT is a tax added to the price of goods and services that are supplied by a VAT-registered business in the UK. It can also be charged on goods and services imported to the UK from another member state in the European Union. Customs usually send traders a VAT return (Form VAT 100) every 3 months. The period covered by this return is called a tax period. Each tax period the trader must declare the total amount of output tax for the period, the total amount of input tax for the period, then take away the input tax from the output tax and pay the balance to Customs. If the input tax is greater than the output tax, the trader can claim back the difference from Customs. Records must be kept of all business supplies, which should include a record of what has been bought and sold. There should also be a record of all the VAT charged and paid for each period covered by the VAT returns - this is called a VAT account. The VAT return, and any tax owed, must reach Customs by the date shown on the return (this is known as the due date), usually one month after the end of the tax period. It is, of course, very important that a business meets its VAT obligations. Comprehensive support from our dedicated team of experts who will advise on best practice VAT management is available at Pierce. To make sure that a business is handling its VAT as efficiently and as accurately as possible our services also include:

  • VAT planning opportunities
  • Investigation and Tribunal support
  • VAT returns and accounting.