I love your videos; they are very insightful, especially for small business owners. Much more interpersonal than many other accountants I've dealt with. Currently onboarding with Heelan Associates 👍
I’m a self employed plumber. And I don’t understand it all. I go to Screwfix and buy a load of stuff. I pay 20% tax. You can’t not pay tax. I become vat registered. I have to pay the government 20% tax. What’s the difference. And I assure you. If it’s not evident. I’m not a savvy businessman. Someone explain the difference please
Sure, it’s a tough one to get head around. Have you seen this one? VAT FOR BUSINESS EXPLAINED! ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-82wUl7szBPI.html More examples here: www.heelanassociates.co.uk/what-does-vat-mean-for-your-business/
I so enjoyed watching your videos! Clear and easy to understand. My self employed work is not able to do during the whole COVID year, and the year before Covid (2019) was my first year. My business has a huge loss, and still ongoing loosing, even though the first year was doing great. Is there possible a way for business to claim their loss from the tax they have paid from the previous year, as the business itself is a total loss? Thank you!
Possibly! Losses have a few options. Some can go 'sideways' and go against other income. Some can go forward, some can go backward. It's very dependant on your exact circumstances so sadly not able to answer in a comment. We do our consult service (paid) where we could look at this for you if you want to find out.
I've gone over, most of it was on materials and I don't have the money at all to pay it. Precious years I've not made much at all and the last year I had a tax rebate of £3000. Do they ever let you off VAT if it was a complete one off.
If you went over in one year, say due to a large on off project, you can ask for an exception from registration altogether. Without that, no there is no let of with the VAT sadly and they will want to backdate the reg from when you went over.
Can you recommend a way to set aside a sum of money to pay the VAT man when the time comes, this will obviously be different for everyone but just wondering if there was a way to prepare for it every 4 months and have the money sat there ready to give him
Ideally if you use and book-keep in something like Xero, you have a 'live' figure you can see. You can then potentially keep to one side in a different account. What many owners do if they haven't got this type of data is worse case they will keep 1/6 of the money that comes in from customers to one side. It's not an exact science but can help.
Can you explain about the rolling thing more. Say a sole trader has reached just below 85 grand in 12 months. Will the threshold reset. If your not vat registered?
Sure so you would track from start to first 12 month point in year one. So say Jan 2021 start. Jan 2021 - Dec 2021 you had £80,000. When you get to the end of Jan 2022, you'd take off Jan 2021 and add on Jan 2022. So say Jan 2021 you did £4000, Jan 2022 you did £10,000: £84,000, take off £4000 = £80,000, then add on £10,000 = £90,000 So you've exceeded the threshold and need to get VAT registered shortly! Congrats you've been successful and have a new challenge :- )
@@HeelanAssociates how do I check my turnover for vat in Xero? I can see my turnover for last 12 months is £66k but apparently this is after tax , how do I check with tax? So that I'm absolutely sure I've went over vat threshold
Hi there, Ive paid my 2019/2020 side hustle tax it was £915 (first time doing this) but it didnt ask me for 'pay account' for 2020/2021. What do i need to do in June/July? Love your videos
Hi Deborah, glad you enjoy the vids! The payments on account generally only happen when you have over £1000 in tax, so you missed it *just*! So nothing in July.
If you have to apply VAT to your product/service, you legally have to. If they don't want to pay, it's like any other commercial situation - you have to decide if to take the business, or if already delivered, what debt recovery action you need to take.
