What VAT is Worth on Their Tax Return
Are you one of the many people in the UK who think what VAT can you claim back can be nothing to worry about? If you do, then you should think again. The reality is that any UK taxpayer is entitled to what VAT is worth on their tax return. Many tax advisors will advise you to claim back as much of your tax-free living allowance (VFDL) as possible, however, this is not always the best course of action. There are other options available, and some can actually save you more money in the long run.
VAT Tax Advisor
One such option is to use the services of a VAT tax advisor to represent you on the tax return. Tax advisors are typically highly experienced and skilled professionals. In addition, they are generally members of a professional body such as the Institute of Taxation Engineers. This puts them in a position where they can negotiate on your behalf with HMRC (HM Revenue & Customs). While tax advisors can represent you during tax claims it is important to remember that they are not tax advisors who advise you on how to reduce or maximize your tax obligations.
What Tax Advisors can do is work
What tax advisors can do is work on your behalf to reduce your tax obligations. They will take care of any official tax paperwork that is required and ensure that any deductions you may be eligible to are applied for. They also help you to manage and control spending and work with you to ensure that all expenses, such as mortgage interest payments, are paid on time. While tax advisors can represent you in formal matters like claims for what VAT you can claim back they cannot act as your personal tax adviser.
Accountancy Firms
Another option available to taxpayers is to work with accountancy firms. Accountancy firms work with tax advisors on a freelance basis. This means that tax advisors can work for themselves but must make all of their accounting works available to the firm for them to take action on. In this case, it is the tax advisor’s responsibility to provide all the documentation necessary to the firm, where they work.
Tax Planning
Most accountancy firms offer a full range of services including tax planning, tax returns and settlement of tax claims. However, there are some accounts that only offer their services to individuals and small businesses and these are the ones that we will discuss. These include limited liability companies and partnerships.
Limited Liability Companies
Limited liability companies and partnerships are not subject to tax. This means that you do not have to pay income tax on the money that you withdraw and use for your own business purposes. The money that you pay out of your business can be either used to pay expenses or paid into the company and used for investing purposes.
UK Tax Authorities
When working with accountants, you should ensure that you get all the information that you can from them so that you can take the right action when it comes to claiming back your expenses. It is vital that you have all the records on hand so that you know what tax deductions you are eligible to make and what tax payments you have to make. Most importantly you need to know what VAT you are liable to. The amount of VAT that you are liable to repay to the UK tax authorities is 5%.
Claim on your Tax Return
When you work with an accountant, you can request them to look at all of your expenses, work history and other transactions so that they can advise you on what you should be entitled to. If you find that you are eligible to make a claim then you should never hesitate to go ahead with it. It is vital that you take action as soon as possible to claim back any money that you have been paying in tax. Failure to make a claim on your tax return can result in severe consequences for you including jail time. It is better to be safe than sorry if you want to keep yourself out of trouble.
