Becoming VAT Registered the Ins & Outs
Becoming VAT registered can be a daunting task, business in the UK who have an annual income exceeding £85,000 should be registered. While companies whose annual income does not exceed this threshold have no legal obligation to pay value-added-tax, they can apply for voluntarily VAT registration. What are the benefits of registering for value-added-tax?
Increased Productivity and Profitability
Getting VAT registered helps both large and small holiday rental companies to upsurge their productivity and profitability. When a company showcases their number, receipts, and invoices on their websites. It gives their website visitors a reason to trust their services, and want to use their vacation rental services.
Enhances Company Profile
Value-added-tax number upsurges the profile of small vacation rental businesses and gives them the power to compete with established companies. Being a limited company is not a requirement of registering for value added tax. Having a VAT registration number showcases the financial muscle of companies. It gives the world an impression that your business is successful which can attract more leads and sales.
Protects Companies from Hefty Penalties
VAT is a mandatory tax like any other for all eligible businesses. Every business whose annual income exceeds the set threshold must register for value-added-tax regardless of their size. A business avoiding tax can pay hefty financial penalties. Small businesses are advised to pay value-added-tax as they then don’t have to worry about the yearly revenue exceeding the set threshold without noticing.
Ability To Claim Paid Value Added Tax
Small holiday rental companies that have a VAT registration number but are yet to reach the set value-added-tax registration threshold can effortlessly reclaim the value-added-tax they paid for the last four years. However, they must provide all the relevant documents including the tax invoices and records for their requests to reclaim the paid money to be granted.
What Adjustments Should Make Once VAT Registered
Once you have registered for VAT you need to start charging from that day instead of waiting for the certificate. Tax will need to be added to sales invoices and having a record of all invoices will be important for tax returns submitted every quarter.
Holiday rental businesses based in the UK, with UK properties should charge VAT for the commissions earned and not on the sale price.
Holiday rental properties based outside the UK which the company is UK registered, will need to charge their owners tax. In this scenario you can still claim value-added-tax on your purchase invoices.
How can iPro help you once VAT registered?
Our system allows you to add VAT to all of your booking or to any other chargeable costs. You can raise reports to clearly show the value added tax on your bookings from the system. If you are registering for VAT our support team are able to guide you through any changes you need to make in our system.
Are you looking for a system which intuitively can add VAT to your products?