VAT: What is it and why do businesses pay it?

If you are self-employed you may have already realised that you might have to register for VAT. If, however, you’re slightly confused about what this means and how it applies to you, you certainly are not alone.

VAT can seem very confusing when you first begin to look into it, so make sure you know all the facts before you move on:

What is VAT?

VAT stands for Value Added Tax and is applied to many different things. It can be used on:

–       Products

–       Materials

–       Services

–       Entrance admissions

What products are excluded from VAT?

Some products and services aren’t eligible for VAT. These include:

–       Insurance

–       Finance

–       Charity fund raising

–       Membership subscriptions

–       The selling, leasing or letting of commercial properties and land

When do I have to register for VAT?

Once your annual turnover exceeds a certain amount, you must by law register your business for VAT. The threshold for this is £77,000. If you believe that your turnover will go over this amount within one month, you must register for VAT at the beginning of that month so as not to break the law.

Why do I have to pay it?

You must by law register for VAT, otherwise you could be fined a considerable amount by HMRC.

Whether you set up a business, take over a business or have only just built up your business to go over the threshold, it is your responsibility to apply for VAT. If your turnover does not exceed the threshold, you may also be able to apply for voluntary registration which can come with many benefits.

Why would I want to voluntarily register for VAT?

Voluntarily registering for VAT could help to give your business credence, which may make customers trust you more. You might also be able to claim some tax back, which could give you a weighty tax return at the end of the tax year.

However, you will also need to consider these facts:

–       You will need to keep a closer eye on your input and output tax in order to account for everything if you are to claim back tax later on. Input tax is the VAT you pay for supplies for your business. Output tax is the VAT on supplies sold within your business. You may be able to claim back input tax.

–       Your VAT records will also need to be kept one hundred per cent clear.

–       You must send out your VAT returns on time, otherwise you could be fined.

How do I register for VAT?

You can register for VAT online and by post. If you find that the forms are a bit too confusing though, you might want to ask an accountant to help you.

VAT can seem incredibly confusing when you first begin using it, but after a while it will become second nature to you.

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Easy Ways to Improve your Finances in 2020

The new year is here, and for many of us, that means it’s the perfect time to start making some positive changes in the way that we live our lives. For some people, the new year is a new chance to start a diet and lose some extra weight. Other people make a resolution to stop smoking or cut down their drinking habits.

One resolution that most Brits can afford to make this year, however, is the decision to cut costs and improve their finances. Even if you’re not struggling to make ends meet, it’s always a good idea to check out some ways that you can keep extra cash aside for the future. That’s why we’ve put together this list of easy ways to improve your finances in 2020.

Keep Your Receipts

Some purchases are easy to keep track of. When you take out a loan for your new car, you can easily see how much you’re spending for it each month. However, one-off expenses are easy to overlook when they’re only very small. If you’re only spending a pound or two on some extra treats for the kids when you’re out grocery shopping, it’s easy to forget all about it.

However, keeping track of all of your expenses will ensure that you’re the first to know when you’re developing a spending problem. Keeping your receipts, or tracking your costs with your online banking system will help you to figure out where you’re overspending.

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Here’s How you Can Start Saving More Money Pronto

No matter where you might be in your financial journey, it’s always possible to learn how to be better with your money. Whether you’re starting out with your first job and you’re putting money away in a savings account for the future, or you’re planning for retirement, we’ve all got goals in mind for the cash that we earn. Fortunately, there are lots of things that you can do to make sure that you’re set up for success with your cash.

Sometimes, all it takes to transform your relationship with money is one step in the right direction. For some people, it will be the decision to start using and managing a budget. For others, the decision to use envelopes of cash could change everything.

Here are some quick ways that you could start saving more money, pronto.

Stop Automatically Renewing

Automations make life easier more often than not. Being able to pay for your bills using direct debits that you set up through your bank will mean that you’re less likely to spend a fortune on things like late fees and overdrafts. However, that doesn’t mean that you should be automatically paying for everything.

Many companies, including the ones that provide your gas, electricity, and insurance, will assume that you automatically want to renew your service for another year if you don’t’ cancel when your subscription is about to run out. While allowing that renewal to happen can be a convenient option, it also means that you might not be getting the best deal. Take some time to look around for better offers before you allow yourself to renew.

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Should you keep all of your money in the bank?

Keeping all money in the bank is a common practice, and if this is something that you do then you’re certainly not the only one. But while it may seem like a good idea thanks to statutory protections, this is not necessarily the case. Inflation can also have an effect, which ought to be taken into account. This article will explore the pros and cons.

Yes: it’s the ultimate safety net

Deposits made to banks in the UK are protected under a scheme known as the Financial Services Compensation Scheme. Deposits made with each banking company (not each bank brand, and some companies own several banks) are protected up to £85,000, meaning that if the bank goes out of business, you’ll get your cash back. Investment vehicles which can rise and fall in value are not protected, meaning that banks are often seen as especially safe.

There are more advantages to using a bank, especially when it comes to quick withdrawals. Bonds, stock portfolios and more often insist that you lose access to your money for a fixed period of time in return for higher returns, or they may take a long time to withdraw simply due to the level of administration required.

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Fabulously Frugal ways to rebuild a poor credit score

Over the last few years, we’ve all become hyper aware of our credit score and what affect it could have on our lives. And with good reason.

At some point, we’re all probably going to want to take out some kind of credit. A poor credit score could, for example, result in us struggling to get a mortgage, leaving our dream home just that: a dream. Even getting a simple credit card could be challenging.

And it’s not just your ability to borrow money that a poor credit score can affect. What’s more, your credit history could even make it problematic to get a mobile phone contract.

While there are loans for bad credit, rebuilding a poor credit score is possible.

Pay your bills on time

One of the simplest ways to boost your credit score is to pay your bills on time.

Making sure that you pay your internet bill when it is due, for example, will show lenders that you are able to manage your finances.

If you can, consider paying your bills by direct debit. This should help you to avoid any late or missed payments.

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The Popularity of IQ Option in UK

Online trading is something which is relatively new in the U.K, even though the services has been around for a long time. As it stands, there are a myriad of options available when it comes to investments in the U.K. especially due to the influx of so many online trading platforms and brokerage services.

Online trading has been one of the most sought-after trading services in the globe right now, where users can make money on the go, through trading in real-time and with multiple investment choices. There are a myriad of platforms offering cryptocurrency CFD trading, forex trading and binary options trading in the U.K and other parts of Europe. The potential to earn big within a comparatively short period of time appear alluring to most traders, especially when Binary Options trading is concerned.

However, like most industries, the trading landscape is also filled with fraudulent platforms, out there to con innocent traders. As a trader in the U.K, you need to avoid such shady brokerage services and platforms at all costs or risk losing a fortune. Thus, there are several considerations that should be made while selecting an appropriate brokerage service provider in the United Kingdom.  Some of the considerations are explained in brief below.

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Ways to avoid festive overspending

It can be hard to stop yourself from overspending at Christmas, no matter how strict you are the rest of the year. Many people admit to over spending on their credit card or taking out a high cost to help them pay for their perfect Christmas. Spending on your credit card is no crime, as long as you can pay it back.

With the average UK household spending £500 upwards on Christmas this year, keeping an eye on your costs is important to avoid being caught in a spiral of debt and taking several months to pay off your holiday season.

The key is to be realistic with what you can afford and to save if you want to spend more than you usually would in a month. Preparation is key. So, to help you avoid overspending this festive period, we have put together ways in which you can do so.

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