Whilst paying over VAT to the Revenue is something none of us are keen to do, many companies are missing opportunities to reduce their bill.
Are you confident you are claiming back all the VAT you are entitled to?
Most importantly, you can only claim VAT back on business purchases if you have a valid VAT receipt or invoice. Make sure you file these for easy reference and keep hold of them – disposing of receipts is a mistake.
Providing you are VAT registered you are entitled to ask your supplier for a VAT receipt or invoice, and there are penalties for businesses who refuse to issue VAT invoices.
If you use the internet to source goods and services at a competitive price, obtaining the necessary VAT documentation can be challenging. However, persevere as it should take little more than a simple email or quick telephone call to get your paperwork. And just think, if you spent £100 on computer consumables from a UK VAT registered supplier you can claim back £13.04 of that on your next VAT return.
When purchasing goods from retail outlets you should check the receipt you are given. It should include the name, address and VAT registration number of the outlet, together with the date, the rate of VAT charged and the value of the goods purchased. Remember that a credit card voucher is not sufficient to support a claim for VAT from HMRC.
When you buy fuel for business journeys always ask for a VAT receipt. This is important whether you claim a proportion of all your motoring costs, a mileage allowance or if your company owns the vehicle. You can claim VAT on the fuel element of the 45p mileage claim, but only if you have VAT receipts to support the claim. If you’re thinking that you haven’t got time for that remember that a £60 fuel bill includes over £7.50 of VAT – surely that is worth finding the time to ask for a receipt!
Do you buy goods from suppliers based in other EU countries? If you provided details of your UK VAT registration number to a VAT registered supplier they will be able to “zero rate” the supply. This means you won’t have to pay any VAT.
Are you confident when handling VAT?
If you would like some help setting up systems to record and calculate VAT, ask Bookworx for help.
Are you using the right VAT scheme?
Not sure? Don’t worry – there a number of different VAT schemes which make the burden of VAT easier to bear. We will be looking at these in more detail another time.