Fixed-fee VAT registration, scheme advice and Making Tax Digital compliant VAT returns for businesses in Leicester and across the UK, so your VAT position is accurate and every deadline is met.
VAT can be one of the more confusing areas of running a business, from working out when you need to register through to choosing the right scheme and keeping up with Making Tax Digital. We handle VAT registration, scheme selection and quarterly returns for businesses across Leicester and the UK, so you stay compliant, avoid penalties, and never overpay or underclaim what you are entitled to.
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We assess whether and when you need to register for VAT, handle the registration process with HMRC, and advise on voluntary registration where it would benefit your business.
We prepare and submit your VAT returns using Making Tax Digital compatible software, reconciling your sales and purchase VAT so your figures are accurate every quarter.
We compare standard VAT accounting against the Flat Rate, Cash Accounting and Annual Accounting Schemes using your actual figures, so you are on the scheme that genuinely suits your business, not just whatever you defaulted onto at registration.
If the Flat Rate Scheme suits you, we confirm the correct trade sector percentage, monitor the limited cost business rules, and keep you compliant as your turnover changes.
We keep your day-to-day bookkeeping up to date on Xero, QuickBooks, Sage or FreeAgent, so your sales and purchase records are accurate and ready well ahead of each VAT return, with nothing to chase at the last minute.
A closer look at how VAT actually works, and the decisions that affect how much admin it creates for your business.
You must register for VAT once your VAT-taxable turnover exceeds £90,000 in any rolling 12-month period, not just your accounting year, or if you expect to exceed it in the next 30 days alone. Many businesses register voluntarily below this threshold, particularly if most of their customers are VAT-registered businesses able to reclaim the VAT charged, since voluntary registration also lets you reclaim VAT on your own costs.
Most goods and services are charged at the standard rate of 20%. A reduced rate of 5% applies to certain items such as domestic fuel and power and some mobility aids. A zero rate of 0% applies to items including most food and children’s clothing, which are still taxable supplies for VAT purposes even though no VAT is charged. Separately, some supplies are exempt or entirely outside the scope of VAT, such as certain financial and property transactions, which affects what VAT you can reclaim on related costs.
The standard VAT accounting scheme is what most VAT-registered businesses use by default, unless they choose to join one of the alternative schemes below. Under standard VAT accounting, you account for VAT based on the invoice date, when you issue or receive an invoice, rather than when payment is actually made or received. Each quarter, you total up the VAT you have charged customers (output VAT) and the VAT you have paid on business purchases (input VAT), and pay HMRC the difference, or reclaim it if your input VAT is higher. This gives the most accurate real-time picture of your VAT position and suits most businesses with straightforward invoicing, though it can create cash flow pressure if customers are slow to pay, which is why the Cash Accounting Scheme below exists as an alternative.
The Flat Rate Scheme is available if your VAT-taxable turnover is £150,000 or less, and you must leave once your total business income exceeds £230,000. Instead of tracking VAT on every purchase, you pay a fixed percentage of your VAT-inclusive turnover to HMRC, with the percentage varying by trade sector. Businesses that spend very little on goods are treated as a “limited cost business” and pay a higher rate of 16.5%, which can make the scheme less attractive for some service businesses. We check whether the numbers actually work in your favour before recommending it.
The Cash Accounting Scheme is available if your VAT-taxable turnover is £1.35 million or less. Rather than accounting for VAT when you raise or receive an invoice, you account for it when payment actually changes hands, which can significantly help cash flow if your customers are slow to pay or if you have bad debts.
The Annual Accounting Scheme is available if your estimated VAT-taxable turnover is £1.35 million or less, and you must leave if turnover reaches £1.6 million. Rather than filing quarterly, you submit one VAT return a year, making advance payments towards your bill throughout the year based on your previous return, with a balancing payment or refund once the annual return is filed. This suits businesses that prefer predictable payments and less frequent form-filling.
Making Tax Digital (MTD) for VAT has been mandatory for all VAT-registered businesses, regardless of turnover, since April 2022. You need to keep digital records and submit your VAT returns through MTD-compatible software rather than typing figures directly into HMRC’s portal. We set you up on suitable software and handle the submissions on your behalf.
VAT returns and payment are normally due one calendar month and 7 days after the end of your VAT accounting period. Late submissions are dealt with under a points-based system, with a £200 penalty once you reach the relevant points threshold, while late payments attract tiered penalties starting at 3% after 15 days, rising further the longer payment is outstanding, plus interest from day one. Planning ahead of each deadline is the simplest way to avoid all of this.
Your VAT return fee depends on your turnover, transaction volume and chosen scheme, so we agree a fixed quarterly fee once we understand your business.
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All fees are guide prices, excluding VAT. Your exact fee will depend on your turnover, transaction volume and VAT scheme.
Straightforward answers to the questions we’re asked most.
You must register for VAT once your VAT-taxable turnover exceeds £90,000 in any rolling 12-month period, not just your accounting year, or if you expect to exceed it in the next 30 days alone. You can also register voluntarily below this threshold, which can be worthwhile if your customers are mainly VAT-registered businesses able to reclaim the VAT you charge them. We review your figures and let you know in good time before registration becomes compulsory.
It depends on your turnover, your costs and how you are paid. The Flat Rate Scheme suits businesses with low purchase costs and simple record-keeping needs, the Cash Accounting Scheme suits businesses who wait a long time to be paid, and the Annual Accounting Scheme suits businesses who prefer one return a year with regular advance payments. We model your figures under each option so you can see which genuinely saves you money and admin time.
Making Tax Digital (MTD) for VAT requires all VAT-registered businesses, regardless of turnover, to keep digital records and submit VAT returns using MTD-compatible software rather than typing figures directly into HMRC’s online portal. This has been mandatory for all VAT-registered businesses since April 2022. We get you set up on compliant software and handle your submissions.
The deadline for submitting your VAT return and paying any VAT due is usually one calendar month and 7 days after the end of your VAT accounting period, which is normally quarterly. We work to your deadline well in advance so there is never a last-minute scramble.
Late submissions are dealt with under a points-based penalty system. You get a point each time you submit late, and once you reach the relevant threshold (2 points if you file annually, 4 if quarterly, 5 if monthly) a £200 penalty applies, with a further £200 for each subsequent late submission at that threshold. We build in enough time before each deadline to avoid this entirely.
Late payment penalties are tiered by how late you are: nothing if you pay within 15 days, a penalty of 3% of the outstanding amount if you pay between 16 and 30 days late, and a higher combined penalty plus a daily-accruing charge from day 31 if payment is later still. Interest is also charged on any late payment from day one. We help you plan cash flow around each payment date to avoid these charges.
Yes. We regularly review clients’ VAT position as their business changes, and if a different scheme would now suit you better, whether that is moving off the Flat Rate Scheme as costs change or onto Cash Accounting to help cash flow, we handle the application and the transition for you.
Tell us about your circumstances and we’ll come back to you with clear next steps, typically the same working day. Our support is available in person, by phone, email or a virtual video meeting, whichever suits you best.