“What are the benefits of outsourcing your VAT accounts to a professional?”, you may ask.
Well, it would probably be quicker to tell you why it wouldn’t be a good idea; there’s a reason why many businesses (and even accountants) outsource some of the more time-consuming admin jobs to firms like us.
Don’t just take our word for it: here are some of the main benefits of outsourcing your VAT accounts to a professional.
VAT is complicated and not every business owner is a VAT accounting expert. That’s understandable — your business has many moving parts, and It’s hard to master all of them.
Outsourcing doesn’t require you to learn the ins and outs of VAT; your outsourced firm already does. Your accountant will understand how to accurately record your VAT payments and report them to HMRC when the deadlines loom.
Because outsourced professionals know the complexities of VAT claims and expenses, they’ll keep track of your receipts over the tax year and reclaim any eligible ones.
Your accountant could suggest deregistering from the VAT scheme if your annual turnover allows, saving you from paying any extra bills to HMRC.
Furthermore, a VAT professional will ensure you hit all your deadlines, saving you from having to pay fines for late submissions.
Outsourcing your VAT accounts can also save you money you would usually spend on finding, hiring and training an in-house professional. You won’t need to pay employer NICs, contribute to another pension or any of the other responsibilities of employing a team member.
HMRC’s long list of rules and guidelines can be a bit draining to navigate, but they’re essential to understand so your business remains compliant.
Meanwhile, there’s Making Tax Digital (MTD) for VAT, which is now mandatory for all VAT-paying taxpayers. Even though smaller businesses have had a while to prepare for the switchover, it can still be confusing.
Thankfully, your outsourced professional has been ready ever since the MTD pilot scheme. They will be using compatible software and will be able to organise your VAT accounts in compliance with the rules.
Although we would recommend getting used to MTD (especially with future extensions of the scheme), you don’t need to tough it alone.
Choosing the right scheme
Once you register, you have multiple schemes to choose from, all of which have their pros and cons. Unsure which one suits your business? Sounds like you could do with the advice of a VAT accountant who knows this type of thing like the back of their hand.
The VAT schemes available include:
- annual accounting scheme
- cash accounting
The annual accounting scheme works similarly to the regular VAT scheme, except you file your returns to HMRC annually rather than quarterly. Your business will be ineligible to join if you have a turnover of £1.35 million or above.
Only smaller businesses with an annual turnover of £150,000 or less can be part of the flat-rate scheme. Under this scheme, your business pays a percentage of your annual turnover.
Finally, the cash accounting scheme means you’ll pay VAT on the date you’re paid rather than when you send an invoice. Again, you cannot join the scheme if you have a turnover of £1.35m and over.
Choosing a scheme is headache-inducing enough, but you don’t have to choose alone. An outsourced professional will choose the best scheme for your business and stick to it throughout.
HMRC, just like time, waits for no one. You have to hit your deadlines and make your payments, though when you have employees to manage and supplies to order, your paperwork can fall by the wayside.
But by outsourcing your VAT accounts to a professional you unlock the speed and efficiency they can offer.
Your VAT duties will be a drop in the ocean for any seasoned outsourced accountant. They’re not easy, but a professional will make light work out of it nonetheless — while remaining accurate in their work.
So why wait?
There are many benefits of outsourcing your VAT accounts to a professional. You’ll find solace in being able to pass over the admin work, giving you some time to focus on what’s important — your business.
Rather than wait for it to happen, ask us if we can provide the VAT respite you’re looking for.
Get in touch to discuss your VAT accounts and how we can help.