Momentum Bookkeeping Services

Common VAT Mistakes made by small businesses

Every year, businesses across the UK make little mistakes here and there with their VAT that can cost them thousands of pounds.

Whether you handle your bookkeeping and accountancy on your own, use a free web system or rely on a friend of a friend to do it for you, there will always be those that make this mistake time and time again.

Why does this matter? Because while your business may be making mistakes with its VAT returns, the HMRC are conducting audits and investigating small to medium businesses on their VAT returns.  So if you have been making lots of mistakes with your VAT, there is a high chance that you get get punished further.

It may seem obvious but it makes sense to get your VAT done right first time.  And that is where we come in. We are Momentum Bookkeeping and we are a bookkeeper service that wants to help your business build momentum and grow into the future. And to try and help, we have put together what we feel is some of the most common VAT mistakes that are made by SMEs every year.

1 – Not registering to pay VAT in time.

When your VAT taxable turnover is more than £83,000 over a 12 month period, you have 30 days to register this with HMRC.  If not then you can receive hefty fines for this.

2 – Putting the wrong numbers into your VAT return

It may seem obvious but when you are filling out your VAT returns, make sure you are entering the correct information into the correct fields in the form.

3 – Entertainment

You can’t claim back VAT on entertainment unless it is for your own employees.

4 – Tax Evasion

Don’t split your business into two thinking it is a good way to spread the VAT load.  HMRC sees that as tax evasion.

5 – Personal Expenses

You may think you can get away with claiming VAT on personal expenses but it can quite easily backfire, especially if you get audited.

6 – Vehicles

You can’t recover any VAT at all on a car purchase but if you lease or hire a car, 50% of the VAT is usually recoverable.

7 – Fuel

You can’t claim the full cost of fuel if your car is used privately without restrictions or without charging VAT via a fuel scale charge.

8 – Employment Status

Make sure that if you use freelancers etc that you know whether they are self-employed. It can have big implications on VAT.

9 – Evidence

You need to ensure you have enough evidence to support your VAT claims.  HMRC are very strict on this.

10 – Not receipt, not claim

Very simply, if you don’t have a VAT receipt, you can’t claim.


Why are we helping with this?

Our goal is to make running your business easier. Whether it’s getting paid by your customers on time, completing your VAT returns or processing payroll; the demands on businesses can seem endless. We know that many small business owners try to do their VAT returns and bookkeeping themselves and we know that many of these small businesses make little mistakes that turn into big fines.  We know that it can seem scary to outsource your bookkeeping and VAT returns to someone else but we are professionals in our field and we know what we are doing.  Covering the full range of bookkeeping services that the typical business would require, we have built our bookkeeping services around going a step further. And that means that we offer not just what you expect, but what you need (even if you didn’t know you need it).

From VAT returns and payroll services to custom built MySQL databases as part of our Bespoke Services. From a once a year service to a daily interaction service into your business; we can be as integrated with your business as you want us to be.

Let us handle your bookkeeping needs so that you can focus on running your business and gain some real momentum.

Initial Enquiries

While you may not love bookkeeping, we do. So whether you have a question about one of our bookkeeping services or you want to discuss a tailored service to suit what you need to get on with running your business, our door is always open.

Call or email us and lets start to build some momentum in your business.