VAT Return is an indirect tax compulsory for businesses whose taxable turnover is £85000 and above. It can be beneficial to even those whose turnover has not yet crossed the threshold. However, once you are registered you have certain responsibilities. As a business it is your responsibility to
- Charge the correct amount of VAT
- Submit the VAT Return on time
- Pay the VAT due on time
- Keep records
Failing to accomplish the above, a business might end up paying high amount of surcharge and penalties threatening the very existence of the business. Factors affecting VAT are
- Amount of VAT charged on goods or services sold
- Amount of VAT to be reclaimed on goods or services purchased
Different schemes are useful to different individuals depending on
- their nature of business,
- the type of rates and
- when the payment is made
There are different VAT Schemes. Choosing the correct VAT Scheme, the business may
- Pay minimum legal VAT Amount
- Improve cash flow
The use of appropriate VAT Scheme leads to a fair amount of VAT accurately calculated which the HMRC cannot question and still in favour of you. It is advisable to calculate your VAT scheme under different schemes for the same period that is using the same amount of purchase-expense and sales (above factors). This will help you decide which VAT Scheme is in favour of the business.
Since a lot needs to be taken care of, outsourcing VAT return services can be beneficial. Outsourced VAT Services are Beneficial for Small Businesses as it saves time, money, cost and provide peace to your life.
Below are some of the advantages of VAT outsourcing:
Increased productivity and profitability:
You can boost your profit margins. Due to excess work you may have to let go of some of the clients or they may leave when you fail to meet your commitments. You can avoid losing clients. During busy season you can pass some of the load. During off season you avoid paying the extra employees you had to keep for busy time. you can focus on client service, meet other requirements of your clients and employees.
Ease the pressure:
You save yourselves from the pressure as you can pass some work to your outsourced firm whenever you are overloaded. You do not have the problem of hiring experts by outsourcing and can concentrate on your business. You may prefer to get rid of the burden by choosing to leave your VAT services under the expert care of outsourced specialist and relish the extra time you save.
Work life balance:
You get free time to think beyond and have better relationship with clients, employees and of course family. You have time to meet all the needs and requirements of your clients and employees and can still have time for personal life.
Proper technical knowledge of VAT return is required for which you have to appoint employees who you need to pay even in off season. You have to also keep extra staff in case of sudden leave of any employee and comply with payroll related laws. It is an overwhelming task for an organization to handle employees.
Make more money:
You can cut down up to 70% cost as you will not have to hire skilled manpower at the same time you can fulfil all the demands of your clients during peak season and thus make more money.
By passing on the excess work you can save your client from paying surcharge or penalties due to late submission. In case you are away, due to a personal, professional or health reasons you may pass on the work and fulfil your commitment to your clients.
You can also pass on the work that a client demands on a particular software which you do not have. Thus, you can supply work through that software where you have not invested yet or have no experience.
If you want to outsource VAT return services, do consider Doshi Outsourcing, an experienced firm with around 3000 clients across UK.