VAT is the tax most likely to cause a cash flow problem, because you collect it on money you may not have been paid yet and hand it over on a fixed timetable.
We handle registration, scheme selection, and Making Tax Digital compliant returns — and help you plan for the payments rather than be caught by them.
What’s included
- Advice on whether and when you need to register
- VAT registration with HMRC
- Choosing the scheme that suits your business
- Preparation and filing of quarterly VAT returns through MTD compatible software
- Checking what you can and cannot reclaim
- Notice of what is due and when, so the money is set aside
Knowing when you have to register
The £90,000 registration threshold is not measured against your accounting year or the tax year. It is based on taxable turnover over any rolling 12-month period, tested at the end of each month.
There is also a forward-looking test: if you expect to exceed £90,000 in the next 30 days alone, you may need to register even if the previous year was well below.
Registering late can mean paying VAT on sales from the date you should have been registered, even if you never charged it to your customers. We set out the detail in “we’re nowhere near the VAT threshold — are you sure?”
Choosing a scheme
Standard accounting, cash accounting, the Flat Rate Scheme and annual accounting all exist for different situations, and the right choice depends on your margins, your customers and how quickly you get paid.
Cash accounting in particular can make a real difference if your customers are slow payers, because VAT becomes due when you are paid rather than when you invoice. If you are not sure how slow your customers actually are, that is a question about debtor days.
Making Tax Digital
VAT-registered businesses must keep digital records and file through compatible software. We work with Xero, QuickBooks and Sage, so returns come out of properly kept records rather than a spreadsheet assembled at quarter end.
The cash flow side
A VAT bill is not a surprise if you plan for it, and a disaster if you do not. Money sitting in the bank is rarely all yours — some of it belongs to HMRC — which is exactly why cash runway calculated on the headline balance misleads.
We would rather you knew the quarterly figure early and set it aside as you go.
Common questions
Should I register voluntarily before I have to?
Sometimes. If your customers are VAT-registered businesses, registering lets you reclaim VAT on purchases while costing your customers nothing, because they reclaim what you charge. If you sell mainly to consumers, voluntary registration makes you 20% more expensive or costs you margin. It is worth modelling before deciding.
What can I not reclaim?
Business entertainment, most cars, and anything with a private element unless it is apportioned. Mixed-use items need care, and claiming things you should not is one of the more common reasons a return gets queried.
How quickly do I have to pay?
For standard quarterly returns, generally one calendar month and seven days after the end of the VAT period, with the return due at the same time. We tell you the figure in advance rather than on the deadline.
What if I have made mistakes on past returns?
Errors below a certain threshold can usually be corrected on your next return. Larger ones need a separate disclosure to HMRC. Correcting voluntarily is almost always treated more favourably than waiting to be found, so it is worth dealing with.
Book a consultation to talk through registration, schemes or an existing VAT position.
VAT rules and thresholds change, and the right approach depends on your circumstances.