Don't Let Old Accountancy Practices Punish You For Success

Friday May 15, 2015

Here's a really good practical example of how RIFT Accounting Ltd proactively helps clients as they grow. Today, on the look out for threats and opportunities, one of our accountants spotted that a client Has exceeded the VAT threshold of £82,000 and so will now need to register for VAT. No problem, you may think, any accountant would see that. But here's the thing: most traditional accountants work on an annual basis and so would not see this until year end.

HMRC, however, give you 30 days to notify them and start paying your quarterly VAT bill once you have reached the threshold. If you do not meet these requirements you will be fined. This means the traditional way of accounting could end up seeing you punished for faster growth and greater success than you anticipated.

Luckily for the client, not only have we been able to help him grow his business more quickly and effectively than he expected, but we have been able to ensure he stays fully legally compliant and doesn't waste money or worry on unecessary fines.
 
Beyond that we were also able to advise him on which type of VAT registration would be most appropriate for his growing business. For example, if you do not have many expenses to reclaim against VAT, we could consider applying for the Flat Rate Scheme for you instead of standard VAT. This basically means that you charge 20% on all of your sales invoices but only pay 14.5% over to HMRC (discounted at 13.5% in the first year of registration). The only catch is you cannot reclaim any VAT on your purchases. This can actually be quite effective, as you generally make a bit of money this way if you do not have that many purchases.
 
The other option would be to register for standard VAT, where you charge 20% on sales and pay over that 20% to HMRC, but you also reclaim the 20% on all of your purchases as well.

Knowing we are making this kind of a difference to our clients is what really makes this worthwhile.

It's easy it is to switch to RIFT Accounting and let us make the saves for you today. We'll be able to start spotting things like this from the day you sign up, and we'll always alert you. Cloud Accounting means that we can show you the figures and what they mean live on the screen, wherever you are in the world.

It's ok - we talk to lots of people who didn't know accountant could do all of this.  To be honest, the reason is that most accountants don't.

Call us on 01233 653006 and see how we can help you today.

 

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