VAT tips that all business owners should consider
It is commonly known that value-added tax, more commonly known as VAT, is a consumption tax that is assessed on the value that is added to services and goods both bought and sold for consumption or use within the EU countries. It is important for business owners to have a clear idea on the EU VAT Rates in order to be able to help their businesses grow. Here are some very useful VAT tips you should definitely take into account if you want to ease things and save more time for your company.
Claiming VAT on the mileage is mandatory
There are numerous owners of limited companies who understand that claiming mileage in order to cover a great part of the expenses of their business’ vehicles is important and this can usually be done at a rate of somewhere between 20 and 45 pence per mile. It is worth mentioning that it is also possible to claim VAT back when it comes to fuel elements of the previously mentioned mileage claims too. All you have to do is determine which the most relevant and convenient fuel rate per mile is, multiply it taking into account the number of miles your vehicles covered prior to applying the VAT fraction and the result is the amount of tax you can actually claim back.
Get professional advice on the right VAT scheme
It is highly important to mention that there are numerous VAT schemes available and most of the times, companies from various industries simply do not know which one is best for their business. This is the reason why it is recommended to get some professional advice from a reputable media company who understands the importance of VAT returns, how they work and which one to choose regarding the industry in which a certain company operates.
Do not be afraid to claim VAT back in case of bad debts
It may happen for your company to have a customer who has an unpaid debt for more than half a year, in which case chances for you to receive payments are significantly reduced. However, what you can do in such situations is to reclaim sales value-added tax that was remunerated to Her Majesty’s Revenue and Customs. Keep in mind that it is strongly recommended to check and review your records on a regular basis in order to have a clear idea on the ones who owe you money.
VAT varies a lot in the EU and it differs from one country to another, each country having its own VAT thresholds and rates. Whenever you decide to open a business in one of the European countries, it is mandatory to check the VAT table and make sure you understand the terms and regulations each country has related to this matter. Even though you do not learn about everything on value-added tax from the very beginning, this should not hold you back and you should “eat on the go”. Always document about it and what is most important, always ask for professional advice whenever you feel the need.