Finance Wise Accounting are VAT accountants for London businesses, at 235 Regents Park Road, Finchley N3 3LF. We are ACCA and ACA qualified, we register you, prepare and file your VAT returns under Making Tax Digital and advise on the scheme and the rules that apply to your trade. Your first meeting is free, fees are agreed in writing before work starts, and we respond within one working day.

VAT is one of the most complex taxes to get right, and the penalties for getting it wrong are unforgiving. We take VAT off your plate — from deciding whether and when to register, through to submitting accurate returns under Making Tax Digital.

What we help with

• VAT registration with HMRC — voluntary, or once you cross the £90,000 threshold
• Preparing and submitting VAT returns, on time and MTD-compliant
• Choosing the right scheme — Flat Rate, Cash Accounting or Annual Accounting
• VAT on property and construction — a common source of costly errors
• Global VAT complexities for businesses trading internationally
• VAT investigations, inspections and disputes with HMRC
• Reviewing the bookkeeping behind each return so the figures are right

Making Tax Digital for VAT

All VAT-registered businesses must keep digital records and file through MTD-compatible software. We will set you up on Xero, QuickBooks or FreeAgent, connect it to HMRC and file your VAT returns through it.

Getting the scheme right

The right VAT scheme can save you money and administration. We look at your turnover, margins and customers and recommend whether the Flat Rate Scheme, Cash Accounting or standard VAT accounting suits you best — and review it as your business grows.

VAT registration in North London: timing and choices

You must register for VAT once your taxable turnover passes £90,000 in any rolling 12 months, or if you expect it to pass that figure in the next 30 days alone. The test is on a rolling basis, not by tax year, and it is the most common VAT mistake we see in new clients. If turnover later falls below £88,000 you can apply to deregister.

Registering voluntarily below the threshold can make sense if your customers are VAT-registered businesses that can reclaim it, or if you have large start-up costs carrying VAT. It rarely helps if you sell mainly to the public, because your prices go up or your margin comes down. We work it through with you before you decide, and handle VAT registration for businesses across North London from our Finchley office.

How VAT returns work with us each quarter

• Your bookkeeping is kept up to date through the quarter in Xero, QuickBooks or FreeAgent
• At quarter end we review every VAT code, check invoices for large or unusual reclaims and reconcile the VAT account
• You see the return and the amount due before anything is filed
• We submit through Making Tax Digital, which applies to all VAT-registered businesses, and remind you of the payment date

Sector VAT rules that catch businesses out

Restaurants, cafés and takeaways

Food eaten on the premises is standard-rated at 20%, and so is hot takeaway food. Most cold takeaway food is zero-rated. A café selling both needs a till set up to separate them, or VAT is overpaid on every cold sale or underpaid on every hot one.

Online sellers

Sales across eBay, Amazon, Etsy and your own website all count towards the same £90,000 threshold. Platforms now report seller income to HMRC, so a missed registration is more likely to be noticed.

The Flat Rate Scheme

The Flat Rate Scheme simplifies returns, but businesses that spend very little on goods are limited cost traders and pay 16.5% of their VAT-inclusive turnover, which can leave them worse off than standard VAT accounting.

Construction

Building work involves the domestic reverse charge, zero-rating on new homes and the reduced rate on some conversions. We check the position before you invoice.

What VAT mistakes cost

Register late and HMRC will want VAT on every sale from the date you should have registered, whether or not you charged it, which comes straight out of your margin. Late returns build penalty points towards a financial penalty, and wrong returns can bring penalties and interest on top of the underpaid tax. A review before a problem is found costs a fraction of dealing with it afterwards. Fees for VAT work are agreed in writing before work starts.

• VAT accountant in Enfield
• Restaurant accountant in London
• Accountant for eBay and Amazon sellers
• CIS accountant in London
• VAT Flat Rate Scheme
• VAT calculator

Partial exemption

A business that makes both taxable and exempt supplies — a landlord with commercial lettings alongside residential ones, a medical or financial practice with some standard-rated income, a charity with a trading arm — cannot reclaim all of its input VAT. VAT on costs that relate wholly to taxable supplies is recoverable, VAT on costs that relate wholly to exempt supplies is not, and VAT on shared overheads has to be apportioned, usually by the standard method based on the proportion of taxable turnover.

If the VAT on exempt activity is small enough to fall within the de minimis limits, it can be reclaimed in full, so the calculation is worth doing every return rather than assumed. There is also an annual adjustment at the end of the partial exemption year. We work out the method, run the calculation each quarter and make the year-end adjustment, and we tell you before you take on an exempt activity what it will do to your recovery.