JK Accountants will advise on the best options from the VAT Schemes below according to your accountancy requirements.

Registration for VAT becomes compulsory when a company turnover exceeds £64,000 (from April 2007). We can also register, and on an ongoing basis, administer a company's VAT accounting needs.

There are three main VAT schemes which are:

- Cash Accounting
- Standard Rate VAT
- Flat rate VAT

Cash Accounting

Under the cash accounting scheme, VAT is only accounted for and paid to HMRC when money is received from a customer. The scheme means that if the company is not paid by its customers, VAT doesn't need to be paid. Although scheme users can't reclaim VAT on purchases until they pay their suppliers.

Unless the company has a customer with extremely lengthy payment terms we would not recommend this VAT scheme to our clients.

Standard Rate VAT Scheme

Under the standard rate VAT scheme VAT is paid back on the sales charged through the company less the VAT which has been paid on business expenses.

This scheme means more administration but if the company will have a high level of business expenses which attract VAT, this may be the better option for the business.

Flat Rate VAT Scheme

The flat rate VAT scheme requires a lot less administration. Instead of calculating VAT on expenses and offsetting against VAT on the company's sales, a percentage of the gross sales is paid back.