Why a VAT Statement Is Necessary for Your Business?

Value Added Tax or VAT registration is necessary for business growth and goodwill in the market. This VAT system has been launched by the government to direct businessmen to pay extra taxes depending on the annual income. There are a lot of benefits to pay VAT.  Reasons of VAT tax clearance include the faster business expansion, establishment of reputation in the industry and contribution of fund for the growth of the country lokalerevisorer.dk is the best accounting service provider which has top auditors and consultants to take care of your financial documents, accounting and VAT.

When Do You Need VAT Statement?

In the UK, threshold of doing VAT registration is £85,000 per annum. If the company touches or crosses £85,000 by the end of the year, the business owner will have to pay and file the applicable VAT returns. It is a must for him to clear input tax in the form of VAT. Therefore, the business owner has to prepare legal papers to prove its honesty in maintaining VAT. The calculation is made on the basis of 12 months. It starts from the turnover period instead of following conventional calendar to count the days for VAT estimation.

VAT Required for Business Promotion and Expansion

VAT is system which is applied to have certain revenues from the businessmen. It is service tax which needs to be cleared. Now, through VAT registration, a company has the scope of becoming a brand to increase the sales of products. At the same time, it helps an organization to strengthen up its business by covering large area and capturing the market as well. VAT promotes the companies which have the good capital amount to fight with recession.

VAT Saves Few Dollars Strategically

When the input tax is higher than the output tax, the company is able to collect some amount from HMRC. It is useful to a company to build up the business. However, In case input tax( here the company clears the VAT)  is lower than output tax( here the company collects VAT from consumers) , the management has to keep the balance by paying the tax to HMRC. Before VAT clearance, the company needs to use advanced accounting software tools to calculate the excess tax payable to government or HMRC in the event of excess output tax collection.

Check Different VAT Programs

Choose the best VAT program which will boost up your business. For instance, flat rate VAT scheme is applicable when the turnover of a company is less than £150,000. Same way, under cash accounting scheme, the company has to pay certain percentage of total income to HMRC. If the turnover is as low as £1.35 million, you can opt for this cash accounting scheme. Generally, the amount for VAT clearance is estimated based on the income within a quarter or 3 months of the whole financial year.  There is also annual accounting scheme for businessman. This particular VAT scheme allows you to clear the tax in advance. After paying taxes, you can complete documentation to prepare tax return files for claims. It is suitable to the businessman whose turnover is less than £1.35 million.

Important Facts

• With VAT calculator, calculate whether you have to add or reclaim money
• Hit top sites for accounting and VAT related information before preparing    the files for VAT registration
• If required try to call representative of HMRC for having necessary tips regarding the VAT.

When any businessman is about to apply for a long term loan, he must have VAT clearance documents. It will be easy for him to convince the top brass of the financial organization or bank to have the loan.  Besides, VAT is the symbol of goodwill and recognition. Top companies which reach the threshold of preset VAT must be bound to pay VAT.