VAT

✅ VAT: What You Need to Know

VAT (Value Added Tax) is the tax that sneaks onto most goods and services in the UK. The standard rate is 20%, with some items at 5% and others at  0%.

If your business turnover hits £90,000 in a 12-month period (2024/25 threshold), HMRC expects you to register. Ignore that and you’re in for some “polite” letters and possible penalties.

To learn more click here.

VAT invoice document with UK currency symbol and colourful circles, representing accounting and tax services.

" Graham helped us enormously in our first year of trading as a limited company. He was responsive with advice, and flexible when we needed to talk to ask questions, and this helped us to have confidence that we're doing the right things to manage the financial side of our business. "

Oliver, Director, Cambridge Technical Marketing

VAT registration and advisory services for UK businesses by GMS Accountants. Expert VAT planning, compliance, and accounting support tailored to your company's needs.

Registering for VAT

You must register for VAT if:

Mandatory Registration

  • Your taxable turnover exceeds £90,000 in any rolling 12-month period.
  • You expect to exceed the threshold in the next 30 days.
  • You purchase goods from the EU worth more than £85,000 in a year.

Voluntary registration can also benefit some businesses below the threshold, particularly if they work with VAT-registered suppliers or clients.

We can help you decide which is right for you.

VAT Rates & Exemptions

Not everything gets treated equally:

  • Standard Rate (20%) – Most goods and services.

  • Reduced Rate (5%) – Energy-saving installs, children’s car seats.

  • Zero Rate (0%) – Books, food, children’s clothes.

  • Exempt – Insurance, education, finance, and land transactions.

VAT is a maze, I can help.

Loan management and VAT consulting services by GMS Accountants in the UK, helping businesses with financial compliance and tax requirements.
VAT calculation and financial advisory services for UK businesses at GMS Accountants.

VAT Accounting Schemes

HMRC offers “choices”:

  • Flat Rate Scheme – Simple, but not always cheapest.

  • Annual Accounting – One return a year, with regular payments.

  • Cash Accounting – Pay VAT when you’re paid, reclaim when you pay suppliers—great if clients are slow paying.

The wrong scheme could cost you. Pick the right one, and you keep more cash in your pocket.

Filing VAT Returns (and Making Tax Digital)

Quarterly VAT returns are now digital only. That means:

  1. Collect invoices & receipts.

  2. Calculate Sales VAT against Purchase VAT.

  3. File online — no paper required.

Deadlines are strict, and face penalty points, then a penalty fine.

VAT return deadline and tax compliance documentation for UK businesses, highlighted on an orange sticky note placed on a desk with calculator and stationery.
Colourful illustrated tablets clinking glasses of wine, symbolising financial harmony and partnership in business, ideal for representing accounting or financial consulting services.

Why Work With GMS on VAT?

Because life’s too short. We offer:

  • Full compliance – registration, returns, deadlines.

  • Scheme advice – the option that actually saves you money.

  • Audit-ready records – that HMRC like

  • Plain English support – we explain VAT without giving you a headache.

If you are looking for a reliable and personable approach for your business, reach out to me.