VAT Consultant

Services By Retailers In UK

VAT consultant is a person who assists businesses in UK to comply with tax regulations. He/she acts as an intermediary between the business and the tax authority. VAT consultant plays a major role in the UK tax system. VAT is the main charge levied on goods and services by retailers in UK. If you are a business owner, it is mandatory to pay the VAT for the purchased items before they can be marketed. The duty imposed on imported goods also form a part of the VAT.

VAT Consultants

All businesses are required to comply with the VAT regulations. Businesses have to calculate and compute taxes according to the rate prescribed by UK tax law. There are various departments in UK responsible for administering VAT. VAT consultants help businesses in calculating their tax liability under the VAT act. They also advise them on the type of VAT that will be imposed on a certain transaction.

VAT Transactions

For instance, if a business intends to buy machinery for its production, then it should pay tax on the machinery rather than buying it from a dealer. VAT calculation can be done with the help of accounting firms. These firms charge fees for VAT consultation. Some accounting firms are authorized by the HM Revenue and Customs to deal with VAT transactions.

Accounting Purposes

The rates of VAT charged on the products by consumers and small businesses are different. Hence, the accounting firms help in adjusting the tax on the purchased goods. It is advisable to use accounting firms only when there is some doubt on the tax liability. Most of the tax issues come up due to lack of information or because of the absence of a computerized system for accounting purposes.
VAT tax is not applicable to retailers. It is applicable only to manufacturers and suppliers. A retailer has to pay tax on the purchase and sale of the goods to customers. In addition to this, the retailer is liable to pay income tax on any duty payable on imported goods.

Pay Tax On Goods Purchased

For example, if an American company wants to import goods from Europe, then he has to pay the duty upon arrival. He does not have to pay tax on goods purchased from abroad. However, the retailer needs to make sure that he is not liable for income tax on the payment of the duty. For this purpose, he uses a VAT consultant.

Types Of VAT

There are three types of VAT - base, central and local. A company pays tax on its sales on the basis of duty basis only. If it obtains goods on sale from another source and it does not have to pay any tax on them, then it is liable to pay tax on its purchases. If it is manufacturing products and it wants to sell its goods on the local duty basis, then it has to obtain separate VAT registration papers. It can also avail itself of the exemption certificate, which helps it reduce the tax on purchases.

VAT Collection

The VAT consultant plays an important role in the process of VAT collection. This is because the consultant collects all the necessary information about VAT before he starts work on a case. He prepares all the documents required by the authorities and checks all the transactions. If any error is made, then he knows the correct charge and amount to be paid to the government. This enables the businessman to save much money on VAT due to which he enjoys the facility of purchasing goods at a low rate and selling them at a high rate without VAT tax being charged. However, it is necessary to select an expert VAT consultant, who possesses good knowledge about VAT and also has vast experience in this field.