Bookkeeping & VAT Returns
done properly

You are legally required to register for VAT once your VAT-taxable turnover exceeds the current threshold of £90,000 in any rolling 12-month period (or if you expect it to exceed that in the next 30 days alone). Voluntary registration below this threshold is also possible and can be commercially advantageous if your clients are themselves VAT-registered — allowing you to reclaim VAT on your own business costs. We advise on whether voluntary registration makes sense for your specific situation.

The VAT registration threshold is £90,000 of VAT-taxable turnover in any rolling 12-month period — raised from £85,000 in the Spring Budget 2024. This is one of the highest VAT thresholds in the world. Once registered, the deregistration threshold is £88,000. These thresholds are kept under review and we always ensure our clients are monitoring their position against them.

From January 2023, HMRC replaced the old surcharge regime with a new points-based penalty system. Each late return adds a penalty point to your record. Once you reach a set threshold (4 points for quarterly filers), a £200 fixed penalty is charged — and a further £200 for each subsequent late return. Late payment interest is also charged on unpaid VAT at 2.5% above the Bank of England base rate. Because we track and submit all returns on your behalf, late filing should never be an issue for our clients.

Yes — HMRC allows businesses to reclaim VAT on certain costs incurred before registration. For goods, you can reclaim VAT on items purchased within the last 4 years that are still held by the business at the date of registration. For services, the lookback period is 6 months. The rules have specific conditions and the claims must be made on your first VAT return. We review all pre-registration costs to ensure nothing is missed.

Introduced in March 2021, the construction services domestic reverse charge (DRC) applies to VAT-registered businesses in the construction industry that are within the scope of the Construction Industry Scheme (CIS). Under the DRC, the customer — rather than the supplier — accounts for VAT on applicable supplies. This applies to most building and construction work supplied business-to-business in the UK, with some exceptions including supplies to end users and employment businesses. Getting this wrong can result in significant VAT errors in either direction.

Making Tax Digital for VAT requires you to keep digital records of all your VAT transactions and submit your returns using HMRC-approved software — spreadsheets alone are no longer sufficient unless they use a compliant bridging tool. In practice, this means using cloud accounting software such as Xero, QuickBooks or Sage. We manage all of this on your behalf — you simply need to ensure your invoices and receipts reach us. We handle the digital record-keeping, reconciliation and submission entirely.

Absolutely. Catch-up bookkeeping is one of the most common reasons businesses first contact us. Whether you are a few months behind or have not properly reconciled your records for several years, we bring everything up to date systematically and accurately. We also deal with any resulting HMRC obligations — such as late VAT returns or outstanding penalties — so you can start fresh with a clean record.