5 things you need to know about VAT accounting

VAT or Value Added Tax, also referred to as goods and services tax in some countries is levied on the price of a product or service from production, distribution or sale to the end customer. If you’re a VAT taxpayer, knowing more about it will benefit you and your business in many ways. Here are five essential things that you need to know about VAT Accounting.

1 – VAT Registration and De-Registration

If your company’s turnover is more than £85,000 per year, you must register for VAT. If your turnover for the year is under this amount, you are permitted to de-register. Once you’ve registered for VAT, a VAT consultant will be of great help for advising you on the latest regulations and keeping you updated. Find out more on VAT consultants in UAE, here.

2 – VAT Schemes
Businesses registered for VAT need to take care of tax while invoicing customers or when their own suppliers invoice them. There are a number of VAT schemes that allow your business to save time or only compose VAT when they are actually paid. An experienced VAT advisor can advise you best regarding which scheme best suits you.

3 – VAT Records
As a company, it is your legal and mandatory obligation to keep accurate VAT records related to any tax paid or received for a fixed number of years and there are penalties for poorly kept records. Keeping records also help you to avoid paying too much tax.

4 – VAT Responsibilities

Your VAT consultant will let you know your VAT responsibilities and assist you in abiding by them. A VAT advisor keeps you informed of all your responsibilities related to Value Added Tax.

5 – VAT Penalties
Penalties differ from country to country and change year after year. Having a professional VAT consultant by your side, avoid making mistakes and paying the price for it.

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