5 Common VAT Mistakes and How to Avoid Them
VAT is one of the trickiest parts of running a business in the UK. If you’re registered for VAT, you already know how easy it is to make a small mistake that leads to big problems. As experienced tax accountants in London, we’ve seen it all.
Here are 5 of the most common VAT mistakes and how to avoid them.
1. Registering for VAT Too Late
2. Using the Wrong VAT Scheme
If your turnover hits the £90,000 threshold (as of 2024) and you don’t register in time, you could face penalties from HMRC.
How to avoid it: Monitor your turnover monthly. If you're close to the limit, speak to a VAT advisor in London to plan ahead.
From the Flat Rate Scheme to Standard VAT, choosing the wrong scheme can cost you money or lead to compliance issues.
How to avoid it: Work with a qualified accountant in London to choose the right scheme based on your industry and income.
3. Missing VAT Deadlines
4. Claiming VAT Incorrectly
VAT returns are typically due every quarter. Missing a deadline can lead to interest charges and even assessments by HMRC.
How to avoid it: Set reminders or use a cloud-based bookkeeping tool. Better yet, let a bookkeeper in London manage it for you.
Not all expenses are VAT-eligible. Claiming VAT on ineligible purchases or without proper receipts can trigger an audit.
How to avoid it: Keep all records organised and check eligibility with your accountant before making claims.
5. Poor Record-Keeping
HMRC requires businesses to maintain digital records under Making Tax Digital (MTD).
How to avoid it: Use MTD-compliant software and work with a London bookkeeping service to keep things in check.
VAT Doesn’t Have to Be Complicated
Avoiding these mistakes starts with getting the right advice. At LOYALS, we offer expert VAT services in London to help you stay compliant and avoid unnecessary stress.
LOYALS Accountants – Helping London Businesses Master VAT the Right Way.