Things You Need to Know about Vat Consultancy Services
If you have a business and the value of your taxable supplies, goods, and services supplied in Dubai, then you must register for VAT with HM Revenue and Customs. This is known as compulsory registration. If your business does not make taxable supplies more than the above threshold, then it follows that you do not have to register for VAT. Though, you may wish to register for VAT on a voluntary basis for a number of reasons.
The main advantages of voluntary registration:
If you are charging business clients who are VAT registered themselves (not the general public), then if you choose to register for VAT this will represent “money in your pocket”, as you can claim the VAT back on some or all of your purchases. Your customers will not mind as they can recover all the VAT back you charge them on your invoices. When making a purchase, always ask for a VAT invoice as this can then be used to claim it back. Try and get into the habit of claiming all expenses as soon as possible as this will help to ease your cash flow.
Being VAT registered is sometimes viewed in a more favorable manner by other businesses. They may assume that you are VAT registered because you have a higher turnover, even though that is not the case. In essence, being VAT registered could mean that other organizations view your business as more credible. If you are a business where most of your supplies are zero-rated for the purposes of VAT, then it may be worthwhile voluntarily registering, as you will be in a repayment situation each month and can claim the VAT back that has been charged to you.
Charge the appropriate VAT amount
There are different types of tax; so you must make sure that you apply the right amount. If you are not sure as to what VAT to charge, search for Vat consultancy services in Dubai.
Pay VAT on time
You should avoid penalties by paying VAT on time. If your VAT return is delayed, you will not be charged the first time this occurs but you a warning will be issued. If it happens again within the following 12 months, an appraisal will be made to determine a surcharge of up to 15%.
Take advantage of the Annual Accounting Scheme
The main advantages are that you do not receive expensive VAT bills when it is inconvenient because your payments are staggered throughout the year. This helps your cash planning; less time is spent filling out VAT returns as you only have to fill our one return a year as opposed to the usual four.
Cash accounting schemes
The main advantage of using this scheme is that it helps cash flow, especially if you have customers who pay late. But, this also means that you cannot reclaim VAT until you have paid your suppliers.
Flat rate scheme, simplified accounting
You can calculate your VAT payment as an affordable rate percentage of your turnover by using this scheme. If you are using this scheme, you are not able to reclaim the VAT which has been paid as this is taken into account and added to the flat rate percentage.
Like all other decisions, as regards tax and accounts compliance, you should make sure that you fully consider all of the consequences before you make a final decision. It is crucial that you consult with your accountant so that he can look at whether or not it would be beneficial for you to voluntarily register for VAT based on your own circumstances.