Charging VAT Advice – Should You Be Charging Value Added Tax


The Point of Sale scheme is the most accurate and often most complex scheme for both charging and submitting VAT. The Point of Sale scheme requires you and your staff to calculate and charge VAT, according to the appropriate tax rate, at the time the sale takes place. Extensive record keeping is essential.

There are two Apportionment schemes, each calling for you to calculate the approximate percentage of your sales and their appropriate tax rate. If approximately 60% of your purchases are for sales taxed at the standard 17.5 per cent rate, then 60% of your takings are taxed at 17.5%. Apportionment scheme 1 is for businesses with sales taxed at the standard and reduced rates, Apportionment scheme 2 is designed for businesses with sales taxed at the standard rate and zero rate.

Two Direct Calculation schemes are available under certain circumstances. Direct Calculation schemes require you to figure the percentage of your goods charged at the various tax rates. You then mark up your majority goods to include the average VAT rate. This is the most complex scheme to calculate, however you must only calculate it once.

Free VAT Advice
Should you require advice regarding charging VAT, you can contact National Advice Service, a UK helpline for VAT, Customs, Excise, Aggregates Levy, Air Passenger Duty, Climate Change Levy, Insurance Premium Tax, Landfill Tax, Money Laundering Regulations and Rebated Oils taxes. Ring 0845 010 9000 (+44 2920 501 261 outside UK, 0845 010 0300 for Welsh or 0845 000 0200 for text phone, for the hearing impaired) Monday to Friday, 8am to 8pm (8am to 6pm for Welsh service.) Translation services are available for languages other than English and Welsh. Odoo ERP

National Advice Service can answer general questions about charging VAT, including rates and regulations, they cannot, however, assist you with your VAT registration. For VAT registration and deregistration advice, you will need to contact your local VAT office.

Private VAT Advice
Should you need additional assistance or advice for charging VAT, consider the hire services of a VAT or tax consultant. Choosing the right consultant is an important business step. The consultant you hire should not only help you reduce your tax liability but also take the stress and frustration out of the process. Choose wisely, your tax consultant will be privy to your financial records and documents.

To help you choose the proper consultant for your specific needs, create a list of all the services you believe you need from your advisor. Beyond calculating the best way for your business to charge VAT, would you like the consultant to assist you with assessments and submitting VAT to HMRC?

Some business types are so unique and their needs so peculiar that specialised financial services are needed. If you believe your business may be one of these, consider seeking out an accountant specialising in your business type.

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