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Vat Planning

2020 / 2021


1. If your sales over a period of 12 months is likely to exceed £85,000, you must apply to be registered for Vat. The registration date will be from the date that the limit is reached.

2. Where the business turnover is less than £150,000 per year, you can apply for the Flat Rate Scheme, which is a simplified way of making the returns and does not affect the vat chargeable to your clients or customers and may prove beneficial in some cases.

3. Cash accounting is also available for business with a turnover of less than £1,350,000., where you only account for output tax on the cash receipts rather than the invoices raised.

4. Input Vat can be claimed on goods purchased before registration if they are still in stock on the date of registration, and may apply to other items.

5. Vat on bad debts can be claimed back provided they are more than 6 months old.

6. If you deregister for Vat, you can still claim back the input vat on purchases and expenses made prior to the deregistration.

7. Filing your Vat return allows you to have an extra 7 days and paying for it by direct debit allows you up to an extra 10 days

8. Goods and services exported out of the UK do not have any output vat and may result in a repayment from the Revenue & Customs.

9. Ensure all input claim is supported by a proper tax invoice with its vat registration number.

10. Special rules apply to Exports and sales to Northern Ireland sales and purchases.

11. Ensure that all input tax claim is backed up by a proper vat invoice showing the vat number.


The information in this publication is by no means exhaustive and is of a general nature for guidance purposes only and as such, we strongly recommend that you obtain professional advice and consult the latest legislation relating to your specific circumstances before taking any action.

We do not provide any warranty that the information is reliable, complete and up to date. As such professional advice must be taken before acting or refraining from acting on any of the above.

We do not accept any responsibility for any loss occasioned to any person acting or refraining from action as a result of the material contained in this publication.


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