How to Get Money Out of a Limited Company Without Paying Tax

How to Get Money Out of a Limited Company Without Paying Tax?

19/01/2022Dividend Allowance , Limited Company , Tax Saving Tips

Running your own company can be more tax-efficient than working through an umbrella company or sole proprietorship. Through it, you can get rewards for your work by maximising your take-home pay and taking advantage of the savings due to the number of withdrawing options available. You can extract money from your limited company through salary, dividends, pensions contribution, and director’s loans. These are great ways to save taxes while taking money out of your company. So it is important to understand the tax implications and timings before deciding the withdrawal method. Let’s find out how to get money out of a limited company without paying tax?   If you want a professional accountant and bookkeeper for your company, we can help you. Our bookkeepers and accountants at CruseBurke are qualified and cost-effective. We save your time, money, and stress by handling all your finances and business problems in no time. Contact us now!   How to Get Money Out of a Limited Company Without Paying Tax? Typically, there are four tax-efficient ways to extract money from your limited company. Let’s explore them:   Salary You can easily extract salary from your business to your personal account. Although you can’t take the majority of your income from your salary, but you can have a monthly pack packet without any tax implications. The tax-efficient way to extract money from your salary is to keep it a minimum below the personal allowance of  £12,570. You will be required to deduct all the taxes, NICs, and employers NICs to pay HMRC.   Dividend Directors tend to be shareholders of the company to take dividends from the company in the form of any profits that a company makes. The company directors must declare dividends and the date of payment agreed at the board of meetings. As dividends can be tax-efficient ways to extract money from a limited company with a dividend allowance of up to £2,000. Above this allowance, you need to pay as per your PAYE rate band. Bear in mind that the income earned from dividends can be added to any other income. The income from other sources and dividend income may push you to a higher tax band. However, with the dividend received, you don’t need to pay NICs.   Check out our company formation packages and our accounting services for small businesses. Contact us right now!   Pension Contribution Your company can contribute to your pension pot through which you can save a significant amount NI and tax, instead of making money through a salary. Note that you can’t receive this fund until you reach the retirement age. The allowance for pension contribution is £40,000 for persons earning up to £150,000 (or is it £240,000). This allowance decreases if you crossed the higher limit. The pensions allowance must not go above your total income from all sources.   Director’s Loan You can take a director’s loan from a limited company to meet your short term personal needs. Extracting money via it can be a useful interest-free and low-cost funding source. Note that this loan is taxable if exceeds £10,000 or if you make interest payments to the company below the official rate set by HMRC. You need to pay back the loan before the year-end otherwise you’d be liable to pay an additional tax charge (S455) on the due balance.   Quick Sum Up Hope you have learned different ways on how to get money out of a limited company without paying tax. Many business owners find extracting money from the limited company through the mix of salary and dividend more profitable, however, it depends on different factors and your personal circumstances. Working out the most tax-efficient way to take money out of your limited company can be complicated and time taking, therefore contact our qualified accountant to do the hassle for you.   We save your time, money, and stress by handling all your finances and business problems in no time! Call us on 020 8686 8876 or email us today.   Disclaimer: The information is intended to provide general information.

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How to Make A Company Dormant

How to Make A Company Dormant?

12/01/2022Business , Finance , Limited Company

Whether you need a break for a while, you’ve got a permanent job offer that you can’t refuse or want to retire, in such cases you may decide to make your company dormant. Whatever your reasons, you can stop running your business for some time by making it dormant. But many of you might not know how to make your company dormant, so here, we’re going to explore how to make a company dormant? Before delving deep into the details, let’s talk about: What is a Dormant Company? When can you make your company dormant? How to make a company dormant? Responsibilities involved with dormancy Advantages of dormancy   CruseBurke offers inclusive accounting, taxation, payroll, company formation and confirmation statement services for Limited Companies and LLPs at the best price. Check out our company formation packages and our accounting services for small businesses. Contact us right now!   What is a Dormant Company? A dormant company is an inactive company that has no accounting transactions in a financial year and does not have any alternative income form. You can make your company dormant right after incorporation or trading for some time. This company could not be involved in any business activities or make any income. Bear in mind that a dormant company needs to be registered with the Companies House and its dormancy status needs to be notified to HMRC. When it starts trading again or generates any income, your business will no longer be dormant.   When Can you Make your Company Dormant? As per the HMRC’s guidelines, to register your company dormant, you must fall under one of the following criteria: Your company has not started its business activities A company used to trade but is not currently trading A company that wants to be removed from the Companies Register It is an off-the-shelf or shell company to be sold A company that will never be trading as it was formed to own an assets If you want to keep your company’s dormancy status, it will be considered active for corporation tax purposes if it meets one of the following conditions:     Involved in a business activity like trade or professional service Buying and selling goods to earn profit Earning interest Offering services Managing investment Receiving income from any other source Is not a flat management company Is not an unincorporated association or club owing less than £100 Corporation Tax There’s more detail on the government website.   How to Make a Company Dormant? If you want to make your company dormant, you need to first register for dormancy status with HMRC. If it was doing trading before, HMRC will let you know whether you need to complete a corporation tax return for the past period. You need to send HMRC online before your company is considered dormant. In addition, you also need to close your payroll and pay any outstanding bills.   Want to make your company dormant? Seek professional help with Accountants in London. Have a look at our inclusive startup or Limited company packages here!   What are your Responsibilities if your Limited Company is Dormant? Even when you are dormant, there are few responsibilities that limited the company director needs to fulfil. Directors are required to file the following documents to Companies House: You need to file an annual confirmation statement to let provide a snapshot to Companies House about the company’s officers and address details Annual accounts at the end of a financial year to prove that the company has not been trading for a year   Advantages and Disadvantages of Making a Company Dormant Here is the rundown of the benefits of making a company dormant: You can take a break from running the company, if you become ill, or need to move somewhere on a temporary basis Lower administrative cost Time to prepare a restructuring plan No limit to keeping your company dormant Cost-effective than closing down a company Here are some of the downsides of it: You need to fulfil some administrative obligations even when your company is dormant Need to file dormant accounts and Confirmation Statements to Companies House on an annual basis   Quick Sum Up That’s all about how to make a company dormant. To do it, you just need to register it as a dormant company with HMRC and need to inform clients and agents that you are no longer trading. If you want to restart trading, inform HMRC within the first three months. You also need to send your annual accounts to Companies House along with corporation tax within nine months of your company’s year-end and send company tax returns to HMRC within 12 months of the end of the company’s year.   Turn to CruseBurke for preparing and submitting the return and save your time, money, and stress. We have a team of skilled accountants who will handle everything with HMRC and Companies House on your behalf. Contact us right away!   Get an instant quote for a customised offer at a fixed fee!   Disclaimer: This blog is written for general information on the topic.

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difference between revenue and income

What is the Difference Between Revenue and Income?

11/01/2022Accounting , Business , Finance

Wondering what is the difference between revenue and income? Even as a business owner, you may find these accounting terms confusing. Revenue and income can’t be used interchangeably. You need to know both for a better understanding of the company’s expenses and overall financial health. Learning these accounting terms will help you to keep your bookkeeping up to date, and this data can be used to manage your finances. Among other accounting terms, revenue and income are the key terms you need to have a grasp on. Let’s look at the difference between revenue and income and how to use income and revenue figures?    If you are stuck with accounting or tax issues? How about speaking to us via a call. We love talking about accounts, taxes, payroll management and opportunities that help you expand your business. Call us on 020 8686 8876 or email us today.   Difference Between Revenue and Income: Quick Overview The amount generated from the sale of goods and services or is earned from the company’s primary operations is known as revenue. Revenue (gross sales) is often referred to as the top line, as it is placed on the top line of the financial statement. On the other hand, income or net income is the amount calculated by taking revenues and deducting the cost of doing business, like taxes or other expenses, etc. It shows the business’s total earning or profitability and it is on the bottom line of the income statement. To better understand the difference, let’s break them down.     Revenue Explained The revenue of a company refers to the total amount of sales made by a company in a specific period. Referred to as gross sales or top line, it is the amount generated from the main business operations of a business (generally by the sale of goods and services). Here is the list of types of revenue that frequently appear in finance and accounting. These include: Sale of goods or items Sale of services, like accounting Rental income from commercial property  Money from investments The sale of tickets to a concert Interest income from lending Here is the simple formula to calculate the revenue for your business: Income – Any discounts – Any deductions for returns = Revenue You can also calculate the revenue by just adding your gross sales without considering any expenses.   Have a query or need more help? Get help from our chartered accountants!   Income Explained Income or net income is calculated by deducting your operating expenses and depreciation/amortisation from gross revenue. It is also referred to as the bottom line of the income statement, as it shows a full picture of cash flow in and out. The term net income clearly indicates that all expenses are subtracted from it. Typically, there are two main types of income: Gross income: Income earned before deducting any expense Net income: It is the income you get after deducting all expenses Here is the basic formula to work out income: Revenue – Operating Expenses – Depreciation and amortisation = Income Income determines how efficient a company is at its spending and managing its operational costs. It is one of the important measures to ascertain the profitability of a business.    How to Use Your Income and Revenue Figures? Both income and revenue can be a great indicator of your business’s profitability. Bear in mind that high sales, don’t always mean that your business is growing as sometimes you can make more sales but may be unable to earn enough to make a profit. There are many reasons for it, like you may be offering a discount or the cost of the goods is equal or lower than their manufacturing cost. By analysing these figures you can get a better overview of the business growth.   Quick Sum Up We hope that you have got a good grasp of the difference between revenue and income. Both of them are essential financial metrics to calculate the financial health of your business. These terms are also important in the accounting context to understand how total earnings are reported in accounting. As a whole, learning these accounting terms will help you to understand the expenses, profitability and overall business value.   We save your time, money, and stress by handling all your finances and business problems in no time! Call us on 020 8686 8876 or email us today.   Disclaimer: The information is intended to provide general information.

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reclaiming vat on expenses

Reclaiming VAT On Expenses – A Beginner’s Guide

06/01/2022Taxation , VAT

VAT registered businesses need to charge VAT on their sales and can reclaim the VAT they pay for business expenses. However, claiming back VAT on expenses is not that simple as it seems, there are a lot of complex rules. With these complexities, reclaiming VAT on expenses can be trouble. In this quick guide, you’ll learn when you can and can’t reclaim VAT, how you can reclaim VAT, reclaiming VAT for business vehicles, fuel, and staff travel and can you claim back VAT on purchases made before registration. Let’s explore!   Getting professional advice from a VAT accountant is preferable to get your VAT refunds and to be saved from hefty tax implications that can wipe out your profit. So get in touch with our experts to be on the safe side.    When You Can and Can’t Reclaim VAT? It is an understood fact that only VAT registered businesses can reclaim VAT on goods and services. If you have paid VAT on the goods and services purchased by the business (input tax), you can make a reclaim. Here are the circumstances under which you can reclaim VAT: when a customer leaves you with a bad debt you’ve bought goods or services for your business Things like stock, computers, phones, and stationery are considered business expenses include. You can’t claim VAT on client entertainment. Here, you need to keep a record of all your invoices and receipts to provide as evidence. However, you can’t make a reclaim on goods and services that:     are  exempt supplies or relate to it are for non-business or personal use are for client entertaining are for car purchases (exceptions) You can’t claim for input VAT if you operate a VAT flat rate scheme unless it is related to Capex (capital expenditure) of more than £2,000 (including VAT). So, as a result, this scheme works better for businesses having fewer expenses (on which VAT can be claimed) compared to their turnover. However, it is not good for those who purchase a lot of standard-rated items.   How You Can Reclaim VAT? The VAT you claim back will depend upon the input VAT you have paid at the time of submitting your VAT return. You need to include the relevant figure in Box 4 of the tax return. HMRC will subtract this from the VAT charged by you in the relevant period and you’ll be required to pay the difference. HMRC may repay the amount to VAT you collected if you paid more than you have collected.   Want to get your VAT concerns sorted! We’ll take care of everything. Get in touch with our VAT experts!   Reclaiming VAT on Business Vehicle and Fuel You can’t claim input VAT on cars, but you can claim it on some vehicles provided some conditions are met. If the input tax on the vehicles is reclaimed by a business, then VAT must be levied at the time of the vehicle’s sale. Read more about Reclaiming VAT on Business Vehicle   Reclaiming VAT on Staff Travel VAT can be reclaimed on employee travel expenses (like fuel, meals and hotels). However, you cannot claim back VAT if you pay your employees for flat-rate expenses ( equipment like tools, uniforms and stationery).   Want to register for VAT? Fill out this form and leave the rest to us!    Can VAT be Reclaimed on Purchases Before Registration? Generally, you can reclaim VAT  for goods purchased up to four years before you are registered for VAT. But for services, it is six months before the registration. Here the goods purchased need to be: used for taxable business purposes still, be held by the business or used to manufacture other goods Services -to qualify- must also be utilised for taxable business purposes. These may include legal or accountancy fees.   Quick Sum Up Hopefully, this guide help you ou to understand the process of reclaiming VAT on expenses and how you can reclaim it. In addition, you can also reclaim the goods bought back up to 4 years before VAT registration. Bear in mind that VAT can only be reclaimed on the goods and services purchased for business use. So, you need to keep all the invoices and receipts to reclaim VAT on business expenses.   CruseBurke offers inclusive VAT services at a reasonable price! Contact our qualified VAT accountants and sort out your VAT issues in no time!   Get an instant quote right away!   Disclaimer: This blog provides general information on reclaiming VAT on expenses.

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Property Income Allowance

What is Property Income Allowance?

05/01/2022Landlord , Property , Tax Issues

The income you earn from land or property, along with the rental income gained from renting a part of a flat or house (like a single room) is known as property income. It also includes income generated from caravans or houseboats. Similar to other incomes, it is also taxed in the UK, unless the property qualifies for reliefs or allowances. The amount of tax you need to pay on this income will be subject to your income tax band. In this blog, you’ll learn the what are tax rates for property income, what is property income allowance, when you can’t use this allowance and what records you may need to make a claim? Let’s explore!   We save your time, money, and stress by handling all your finances and business problems in no time! Call us on 020 8686 8876 or email us today.   What Tax Do I Need to Pay on my Property Income? The income tax band determines the rate of tax you need to pay. The rates of property income are the same as those of your personal. However, you may fall under the higher rate band if your property income and other income are added together. Here is the income tax you need to pay as per your income tax band:     What is Property Income Allowance? It is a standard allowance or tax exemption on which no property tax is payable. Currently, in 2021-22, you get a tax free allowance of £1,000 a year (from 6 April 2017 onward). If your income is below this allowance, you don’t need to inform HMRC or declare any tax return. However, sometimes you need to complete a tax return even if your income is below £1,000. But, if it’s higher you need to declare your property income and complete a tax return. And you may need to file a tax return for other income. You must inform HMRC if: your property income is more than the property allowance from £1,000 up to £2,500 the property income is more than £2,500, you need to register for self-assessment   Want to register for Self-Assessment? Allow us to do the hassle on your behalf. Save your time by filling out this form and let us handle everything!    In case, your annual gross property income from one or more sources is over £1,000 you can still use these allowances, instead of subtracting any expenses or allowances. With this allowance, you can subtract £1,000 from your income as partial relief which should not be over your income. If you find that your expenses are over your income, you need to consider availing of expenses instead of the allowance. And, if you own property jointly, you’re each owner is eligible for the allowance as per the share of the rental income.   When You Can’t Use this Allowance? You are not eligible to use the property allowance if you are making income from: employment (your employer/employer of your spouse/civil partner) a partnership where you or someone associated with you are partners a company owned or controlled by you or someone associated with you You are also not eligible to use property allowance if you: deduct expenses from income by renting a room in your own home, rather than availing Rent a Room Scheme claim the tax reducer for finance costs (such as mortgage interest for residential property)   Records to Keep for Property Allowance You need to keep records of your income to claim for this allowance. Records may include: a spreadsheet of your income receipts copies of your invoices (both paper or electronic) bank statements emails indicating income earned bank deposit pay-in records statements from the company who make payment to you a diary/appointments book showing your income from the customers   When Do You Need to Contact HMRC? You need to get in touch with the Income-tax helpline if: you don’t know whether you are eligible for this allowance or not you’re not registered for self-assessment and have paid tax via PAYE on some of your property income (you may be due a refund)   Quick Sum Up So, that’s all about the property income allowance that is £1,000 for the year 2021-22. The tax you will pay on your property income would be the same as your personal income. However, you may fall within the higher rate tax band when your property and other income is combined. You don’t need to file a return if your property income falls below the property allowance. And make sure to keep records to provide HMRC with proof of your property income.    Our property accountants are reliable and transparent. If you need any help with accounting, tax payroll, and other finance-related issues. We will solve your tax issues in no time and at an affordable price! So, contact us now!   Disclaimer: The information is taken from the HMRC and is intended to provide general information.

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How to Avoid Capital Gains Tax on Gifts

How to Avoid Capital Gains Tax on Gifts?

03/01/2022Tax Issues , Tax Saving Tips , Taxation

If you are wondering how to avoid capital gains tax on gifts, you’re in the right place. You might have heard this many times that gifting a property will cut down or eliminate the capital gains tax. But this assumption is not correct with every person to whom you gift. As the gift should be only given to a specified person or organisation to avoid CGT. In this quick post, you’ll learn what is CGT, and how to avoid it. So before discussing how to avoid capital gains tax on gifts, let’s start with when you actually need or needn’t pay capital gains tax.   If you are stuck with accounting or tax issues, particularly the CGT? How about speaking to us via a call. We love talking about taxes, payroll management and any opportunities that help you expand your prospects. Call us on 020 8686 8876 or email us today.   Understanding Capital Gains Tax (CGT) Capital gains tax or CGT is the tax levied on the profit when you sell or dispose of any asset that has increased its value since it was bought. CGT is only payable on the gains you made not on the amount you receive while selling or disposing (or gifting) of any assets. You don’t need to pay CGT on the assets that are non-taxable and if the gains you made are below the tax-free allowance in a year.   When Do You Need to Pay CGT? Here are the circumstances where you need to pay CGT on the gain when you sell or dispose of: a property that is not your main residence or home shares that are not in ISA or PEP assets of your business most personal possessions worth £6,000 or more, apart from your car your main home if you’ve rent it, used for business or it’s very large The assets listed here are all considered chargeable assets.   When You Don’t Need to Pay CGT? In addition to the gain on the non-taxable assets, you don’t need to pay CGT on gains above any tax-free allowance (£12,300. £6,150 for trusts). Furthermore, when you gift something to your spouse, civil partner or a charity, you are not required to pay this tax. Let’s dig deeper into it. Find out: CGT rates here!   How to Avoid Capital Gains Tax on Gifts? Here are some ways to avoid capital gains tax on gifts:     Use your CGT allowance of £12,300 (2021-22) Offset against losses over gains Transfer your assets to spouse or civil partner Contribute to a pension Gives shares to charity Use your annual ISA allowance Reduce your taxable income Spread gains over tax years Invest in small companies   Have a query or need more help? Get help from our accountants to find out how to avoid CGT!   CGT on Gifts to Your Spouse The gifts you made to your spouse or charity are exempted from capital gains tax. It means that you don’t pay Capital Gains Tax on those assets you sold or gifted to your spouse or civil partner, unless: you gave them goods for their business to sell on you separated or divorced and did not live together at all in that tax year However, your spouse or civil partner need to pay tax on the gain if they further sell or dispose of the asset. You can work out the gain by subtracting the value of a first owned asset with their value when they’re disposed of or sold. You also need to keep records of the documents as evidence.   Gifts Made to Charity Assets that are sold or disposed of to the charity are exempted from CGT. If you fall within both conditions, you may be liable to pay if you sell an asset to charity: less than market value more than you paid for it Calculate your gain according to the amount you are paid by the charity, rather than the asset’s actual value.   Quick Sum Up Hopefully, you have got a basic overview of what is CGT, when it is taxed, when you don’t need to pay it and how to avoid capital gains tax on gifts. So, by using the above tips, you can save thousands of pounds. With careful planning and by taking the help of our accountant, you can reduce your CGT effectively without getting into any tax avoidance or evasion.   Contact us right away!   Our accountants at CruseBurke are qualified and cost-effective! We save your time, money, and stress by handling all your CGT issues! So, allow us to do this at an affordable package!   Disclaimer: This blog is just written for general information and should not be taken as expert financial advice in any form.

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Self Employed or Limited Company

Self Employed or Limited Company: What’s the Difference?

30/12/2021Accounting , Accounting Issues , Limited Company , Sole Proprietorship

While setting up your business, one of the most crucial decisions to make is to choose a business structure. There are a lot of business structures to choose from. Limited liability partnership is the less popular business structure used by professionals. The majority of the business structures in the UK are either self employed or limited company. According to the latest reports of Statista, there are around 4.3 million self-employed workers in the UK. On the other hand, there are over 4 million limited companies registered in the UK. Let’s dig deep into both to know what are they, are taxed the same, and what cost and administration is involved. Let’s kick off with what is self-employed and what is a limited company?   We save your time, money, and stress by handling all your finances and business problems in no time! Call us on 020 8686 8876 or email us today.   Self Employed or Limited Company: Differences Let’s have a quick glimpse at self-employed and limited companies.   What is a Self Employment? Self-employed persons work for themselves as sole traders. There are no shareholders or officers and the self-employed person has total control over his business and is liable for all the profits and losses personally. The losses made by a sole trader directly impact the personal finances of a sole trader. Income tax is payable on the profit earned and needs to pay Class 2 and 4 National Insurance as a self-employed individual.   What is a Limited Company? A limited company is a separate entity with its own identity and it is separate from shareholders and directors. The personal finances of directors of the limited company are kept separate from the company until there’s fraudulence or any breach. A limited company has to pay corporation tax on the taxable profit and they need to deduct income tax and NI from the employees’ salary through PAYE.   Tax Implications Let’s see how self-employed persons and limited companies are taxed.   Self Employed Tax Self-employed persons need to pay income tax through Self-Assessment.  They need to register for VAT if reached the threshold of £85,000 (2021/22). Here are the tax rates and threshold that a self-employed person should know: Band Taxable income Tax rate Personal Allowance Up to £12,570 0% Basic rate £12,571 to £50,270 20% Higher rate £50,271 to £150,000 40% Additional rate over £150,000 45% The deadline for online tax return is Midnight 31 January 2022. Moreover, self-employed persons need to pay Class 2  National insurance if the profits are £6,515 or more a year and Class 4 NI on profits over £9,569. Here is the rate of NI rate you need to remember: Class Rate for tax year 2021 to 2022  Class 2  £3.05 a week  Class 4 9% on profits between £9,569 and £50,270 2% on profits over £50,270 We can register you as self-employed to HMRC on your behalf!  Fill out this form and let us handle everything!    Limited Company Tax Instead of income tax, limited companies need to pay 19% Corporation tax on the annual profits. Company directors are levied tax based on the salary they earn from a limited company. Dividend tax is paid on dividends received from a company. In addition, income tax and Class 1 NI is payable on any salaries paid by the company. And companies need to pay Class 1 Employers’ NICs on salaries paid to employees.   Want to incorporate a company? Get in touch with one of our professionals. Check out our company formation package!   Administration and Costs A limited company needs more administration and management tasks compared to self-employed.   Limited Company Administration All the limited companies of the UK need to register with Companies House. It must make sure to inform the registrar of companies informed of any changes made, need to file confirmation statement and PSC each year along with the company accounts. The cost of forming a limited company is affordable and the accountants are responsible to manage the accounting tasks along with dealing with HMRC and Companies House.   Self Employed Requirements There are fewer legal responsibilities and administrative tasks in forming a limited company. You just need to register for self-assessment and pay the due tax and NI on time.   Quick Sum Up So after giving this blog a read, you have now understood which business structure to choose: self employed or limited company. As a self-employed, you are your own boss and liable to pay tax and NI 2 & 4 on your earnings. Whereas, limited companies need to pay corporation tax and Class 1 NI on salaries paid to employees. Bear in mind that there is less hassle to work as a self-employed, but with limited companies, you have to meet administrative and legal responsibilities.   Turn to us if you need any help with accounting, tax payroll, and other finance-related problems. We will solve your tax issues in no time and at an affordable price! So, contact us now!   Disclaimer: This blog contains general information about the topic.

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Reverse Charge

Reverse Charge on EU VAT

20/12/2021Taxation , VAT

When an individual has experience with suppliers to avail their products or services in the EU countries, due to reverse charge the responsibility of recording VAT transactions moves from the supplier to the buyer to avail the products or services. This makes the supplier free from the responsibility of recording VAT registration in the very country where he is making the supply. Moreover, in case the seller has to deal with any local VAT for the products and services supplied by them due to the reverse charge, even that can be easily reclaimed and recovered with the help of EU VAT. In order to make the VAT simple among 27 member states, a reverse charged mechanism was introduced in 1993 when the tax system was of the European Union was reformed as well to ensure the single market. Before we delve into further discussion, we need to have a look at the following points of discussion in this article. This includes the following:     Reverse Charge – How Does It Work? Exapmles and Use of Reverse Chaarge The Bottom Line   Stuck with your accounts and looking for a helping hand? How about you get our guys on a quick call. We love talking about taxes, payroll management and any opportunities that help you expand your prospects. Call us on 020 8686 8876 or email us today.   Reverse Charge – How Does It Work? The moment the reverse charge is actually applied, the declaration is made about the purchase and sale that include input VAT and output VAT by the recipient of the products and the services while doing the VAT return. In this process, the same return is associated with the cancellation of the cash payment of both entries. However, the authorities are of the view that the transaction is still reported to them by some of the special boxes that are in the return for the supply of the products and services made for cross-border purchasers.   Do you intend to learn more about the reverse charge? Get in touch with one o our professionals and get instant help now.   Examples and Use of Reverse Charge: Here is the discussion of some examples that will explain how to reverse charge is applied among EU members states. This includes the following: The reverse charge is applied when there is a supply of required products or services is made in an EU state to a business that is VAT registered. Some of the services like live events and immovable properties come under the special rule and this depends on the place where the supply is made for any product or service. The reverse charge is also applied when the products or services are being provided to a person or business who is in another EU state Moreover, if the EU business is not VAT registered, it becomes an obligation to get VAT registration completed before the supply is made. In order to get yourself the services outside of Europe.   The Bottom Line: Now that you have developed a basic understanding of the reverse charge and the relevant details, we can sum up the discussion by saying that the process in itself is simple with its rules, however, if not followed according to the set of rules it may cause problems for the supply and recording. We hope this article helped to develop a better understanding and ensure the seamless working for your supplies.   Our accountants at CruseBurke are qualified and cost-effective! We save your time, money, and stress by handling all your finances and business problems in no time! So, allow us to do this at an affordable package!   Disclaimer: This article intends to provide general information based on reverse charge and the relevant details.

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