VAT Returns & VAT Registration Accountants in London

VAT registration becomes compulsory when your taxable turnover exceeds £90,000 in any rolling 12-month period — a threshold in force since April 2024. This is the trap many growing businesses fall into: the test is not your accounting year or the calendar year, but any 12 consecutive months, checked continuously. You must also register if you expect to cross the threshold in the next 30 days alone.

Miss the registration deadline and HMRC can charge you the VAT you should have collected — out of your own pocket — plus penalties. If turnover later falls, you can apply to deregister once it drops below £88,000.

Some businesses choose to register voluntarily below the threshold. That can make sense if your customers are VAT-registered themselves (they reclaim the VAT you charge) and you want to recover VAT on your own costs. We'll run the numbers with you before you decide either way.

Rate	Applies to
20% — standard rate	Most goods and services
5% — reduced rate	Domestic fuel and power, children's car seats, certain energy-saving installations
0% — zero rate	Most food, books and newspapers, children's clothing, exports

Some supplies are exempt (such as insurance, education and most financial services) or outside the scope of VAT altogether — and the distinction between zero-rated and exempt matters, because it affects how much input VAT you can reclaim. Getting a rate wrong on your invoices is one of the most common and expensive VAT mistakes we see, particularly in construction, food and mixed-supply businesses.

• Flat Rate Scheme — for businesses with turnover up to £150,000 (excluding VAT). You pay HMRC a fixed percentage of gross turnover instead of tracking VAT on every purchase. Less admin, and sometimes a modest saving — though "limited cost" businesses face a higher 16.5% rate, so it's not right for everyone.
• Cash Accounting Scheme — you account for VAT when money actually changes hands, not when invoices are raised. A genuine cash-flow lifeline if your customers pay slowly, available up to £1.35 million turnover.
• Annual Accounting Scheme — one VAT return a year with agreed instalments through the year, instead of four quarterly returns. Useful for businesses with stable, predictable turnover.

The right scheme depends on your margins, your customers and your cash flow. When we take on a VAT client, reviewing scheme choice is one of the first things we do — switching schemes at the right moment can be worth real money.

Making Tax Digital (MTD) for VAT is mandatory for all VAT-registered businesses, regardless of turnover. That means two things in practice:

• You must keep your VAT records digitally — spreadsheets alone are only acceptable with bridging software, and paper records no longer qualify.
• Your VAT returns must be submitted through MTD-compatible software — the old HMRC online form is closed for VAT.

We set clients up on compliant cloud software such as Xero, QuickBooks or Sage, connect it to HMRC, and either file your returns for you or review them before you press submit. If you're still on paper or a basic spreadsheet, we'll manage the whole transition so nothing falls through the cracks.

Most businesses file quarterly, and each return — with any payment — is due one calendar month and seven days after the end of the VAT quarter. So a quarter ending 31 March must be filed and paid by 7 May.

HMRC now uses a points-based system for late submissions: each late return earns a penalty point, and once you hit the threshold (four points for quarterly filers) you receive a £200 fine, with a further £200 for every subsequent late return until your record is cleared. Late payment is penalised separately, with charges that escalate the longer the VAT stays unpaid, plus interest.

The system is designed to punish repeat lateness — which is exactly what happens when VAT is squeezed in around running the business. Our clients simply send us their records (or we already hold them if we do the bookkeeping) and the return is prepared, checked and filed well before the deadline, every quarter.

1. Free initial review — we check whether you need to register, whether a voluntary registration or special scheme would benefit you, and quote a fixed fee.
2. Registration handled — we prepare and submit your VAT registration to HMRC and set up MTD-compatible software.
3. Quarterly returns prepared and checked — we reconcile your records, verify the VAT treatment of unusual transactions, and make sure you reclaim everything you're entitled to.
4. Filed on time, every time — you receive confirmation of submission and a clear note of exactly what to pay HMRC and by when.

If HMRC ever opens a VAT enquiry or compliance visit, we deal with them on your behalf — we've been doing so for South East London businesses since 1991.