How do you pay your taxes?

dvdbunny

dvdbunny

dvdbunny

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Hi Guys

I got an online store, but unfortunately haven't made much sales. And constantly the inland revenue sends me the tax form that i am supposed to fill out. I haven't been doing that and have had to pay many penalties which is causing me to now go into the overdraft with my bank. I hope you can help me, how do i fill out this form that they keep sending me

First i get this yellow one titled:

Value Added Tax
Notice of Assessment of tax
Surcharge liability notice extension

Our records show that the return of your value added tax for the period from 1 January 2007 to 31 march 2007 has not been received

The commissioners of customs and excise therefore asses the amount of tax payable by you for the period as being £24

Now a few months ago i got this charge as well and so i called the HM customs and excise and they said yeah you got to pay it, so i ended up paying the charge. Did i get this form because i didn't bother to fill out my tax return or is this perfectly normal, does everyone pay this £24 every 3 months?

Then each month, or i think it's every 3 months i also get this green form titled:

Value added tax return

Do you guys know how i fill that in? I have called them but always find it difficult to take things down on the phone.

Even if my store does not sell any thing for that period on the Value added tax return, do i still need to fill it out and how?

I so hate filling out these forms and wished i never bothered getting a VAT number

Please help me out

Many thanks
 
The last time I filled in a VAT return form it was incredibly simple, there was only a couple of bits to fill in, unless they've altered it. The calculation on what VAT I owed were sometimes tricky but the form itself .. easy.
 
Yes you always need to fill out and send the forms.

VAT forms are very very simple to fill out!

I run a business with a good turnover and the VAT forms only take about 10 minutes to fill out each time because of the way we log all of our sales and purchases.

If you are not doing this you are really leaving yourself open to a lot of hassle. It's really not hard, you total up the VAT you've paid on purchases, and total up the VAT you've charged on sales. then 2 minus 1 = what you pay.
 
Why did you register for VAT in the first place? (OP)

I think your turnover has to be £64,000 per annum to compulsory register under the law.

Although there are voluntary VAT registrations allowed below that limit.
 
hi over clocker

When i buy from from my wholesaler i use my VAT number to buy the goods without VAT. Then i include my markup price (my profit) Then i add VAT (17.5% to that markup price). Then i sell.

Now when i get the Value added tax return, it's 1 double sided green sheet of paper. The back just has information. The front has a group of boxes

right at the bottom you tick a box if you are enclosing a payment. Do i need to enclose a payment?

anyway above that there are a group of boxes 9 in total. which number box do i fill in? in each of those boxes there are 2 areas to fill in, one area there is a £ sign and to the side there is a dotted line with a P sign what does that mean?

I sometimes buy from my wholesaler a bulk order, the wholesaler is based in Ireland. I buy without VAT and when i receive the goods i still don't pay any VAT. But sometimes i also opt for the wholesaler in Ireland to drop ship the order direct to my customer.

Now i also keep getting this EC Sales List, again that is a double side form, on the back it's just information. On the front it has 15 white boxes to fill out. Now i don't have to do that right. Just because my wholesaler is in Ireland, doesn't mean i am in dealing in Ireland. At the time being i only sell inside the UK.

I also a while back last year i sold some goods but never claimed back the VAT, is it too late to receive it now?

TIA

Edit: hi seaviewuk, i registered for VAT at this early on as i didn't want to have to pay VAT when buying a bulk from the wholesaler, i mean my products are already way over £100 at wholesale and retail for just over £200, so that's quite a lot of VAT i would lose if i had to pay it, so i wanted to get VAT registered.
 
Last edited:
benktlottie said:
I have a very clever accountant. I havnt income tax directly to the revenue for 7 years...

Changed this year though when they changed the laws on the way IT Contractors conduct their affairs. Last month I paid £1300! :mad:
Click to expand...

Can you not register yourself as an employee of an offshore company then surly you'd bill them for the work and not pay Uk tax ?
 
Just seen this post along with your other one.

You really should go and see an accountant.

It seems that you do not understand the rgulations for trading that you need to follow.

Do you keep accounts or just loads of invoices/receipts all over the place.

An accountant will usually give you some time free and as a new(ish) business their charges may not betoo high.

seriously you need to consider this before you dig a bifgger hole.

You cannot just avoid VAT/TAX, next thing will be HMRC wanting to visit and go through your books with a fine toothcomb.
 
As above, if you're not doing your book keeping properly, you will get ****** up the..... by HMRC

You need to know what you are doing. Have you read the notes on the back of the VAT form? It's not hard, one box for VAT received, one box for VAT paid, other boxes for EU sales/purchases...
 
I do keep all my invoices in a file, in a drawer

But i just having a bit of hard time understanding this all

what i don't get is the Value added tax return form, out of those 9 boxes, i thought i am supposed to list each prouduct i have sold along with the price i paid without VAT and the VAT price and then claim it back, but how do i do it there is not enough room to list all the products
 
A few things to think about.

Always pay the VAT man - he will come after you and fine you through the roof if you haven't been paying.

Ignorance of the law is not an excuse - they will fine you anyway.

For a small retailer under the mandatory VAT turnover limit it is not worth your while being VAT registered, as you have to add 17.5% to your sales price to pay to the Revenue - this tends to make you less competitive to other retailers offering the same goods.

Importing from the EU if you are VAT registered is zero rated for VAT - there is no input VAT to reclaim on your VAT return as you haven't paid any.

You still have to charge your customers output VAT (because you VAT registered) at a rate of 17.5% (on most goods).

Taxes you should be paying - assuming you aren't registered as a limited company:

Class 2 National Insurance (this is £2.15 per week from memory - but it has been a while) - as you are self employed

Income tax and class 4 National insurance - based on your profits in the Financial year - a bit too complicated to go into here.

VAT - 17.5% - which you add to what you charge your customers (you have to quote + VAT on your prices)

NB your invoices need to be in a set format including your VAT number, VAT amount being charged etc.

Best advice - it is worth going to have a chat with an accountant, failing that call the Inland Revenue advice line - number on their website - www.hmrc.gov.uk
 
benktlottie said:
I have a very clever accountant. I havnt income tax directly to the revenue for 7 years...

Changed this year though when they changed the laws on the way IT Contractors conduct their affairs. Last month I paid £1300! :mad:
Click to expand...

Coming from one of the majority who pay 22% or more PAYE every month...

...Good!

It was about time they closed tax loopholes like that, if you use the NHS or the library or any other public service then you should be paying your taxes just like the rest of us.
 
dvdbunny said:
I do keep all my invoices in a file, in a drawer

But i just having a bit of hard time understanding this all

what i don't get is the Value added tax return form, out of those 9 boxes, i thought i am supposed to list each prouduct i have sold along with the price i paid without VAT and the VAT price and then claim it back, but how do i do it there is not enough room to list all the products
Click to expand...

Nope, you total up all the VAT from the sales for the entry, and you total up all the VAT from the purchases for the other entry.
 
DVDBunny, i think your simply confusing yourself!
The simplest way to do it would be to open up an excel for all the VAT returns and enter all your sales/purchase prices into it. On the sales side, have one column for Gross, VAT and Net price for all the jobs along with the sales invoice number!

On the purchase side have a column for the Total, VAT and the expense they relate to e.g. petrol to motor!

Once you have the total VAT figure for your sales and purchases then you simply enter this figure into the vat return form ;)

By analysing your payments along the way you can save yourself a lot of money too at the accountants when all your expenses are already analysed :cool: I do VAT's every month for local companies here!

If you have any problems then feel free to contact me :)
 
hi many thanks for all your reply guys, your all really helpful, and i really thank you all. I am a fast learner so once i do learn this everything should be fine, because like you say it isn't hard. But one thing i would like to know, do you have to send your vat return form in once a month or once every 3 months?

Also if i don't make any sales in that time frame what do i do?
 
It depends, there are different schemes for VAT returns, either annual, monthly or the most common every 3 months! According to your first post it seems as though your on the 3 months scheme which means you need to send in the return form every 3 months after your VAT period e.g. If your VAT period is 01/01 > 31/03 then this return has to be returned with payment or nothing if your due a refund by 30/04!

If you dont have any sales vat then you simply enter 0 into the box. You wouldnt know by any chance if your on cash or invoice accounting would you....?

Cash Acc - You pay/claim the vat on the sales/purchase when you actually pay for the item or be paid

Invoice Acc - You claim/pay the vat when you receive the invoice regardless or whether you have paid it or not!
 
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