At a maximum, the HMRC will charge you 100% of the VAT, plus interest until the amount is paid in full. So, for example, if you’re a builder that pays VAT on materials, you can claim it all back at the end of the year. The total amount that you will have to pay HMRC, or that will be refunded to your account.
Be sure to keep business expenses separate from personal ones, so you can easily identify which ones can be claimed against profit to reduce tax. You can claim tax back from lots ofbusiness expensesto reduce your overheads. You’ll need receipts to substantiate your claims from HMRC, so keep them stored somewhere safe and organised in different business categories. Never make late payments and give your clients a payment deadline so you can chase them effectively. Take note of any late payers and consider not working with them if they keep missing payments. This is called credit control, and the aim is to keep your cash flow healthy.
You are legally obligated to register for VAT and you’ll need to complete a VAT return. So, make a disclosure to HMRC and tell them how the situation came about. Make sure to show records of how you’ve refunded your customers as well. If you have more than one customer, construction bookkeeping you’ll need to do this for everyone that you’ve incorrectly charged. As we’ve stated in the previous section, charging for VAT when you’re not VAT registered is illegal. And just to be clear, a dwelling means a house, flat or another place of residence.
Discover why bookkeeping is so important, and get started with the task of setting up your books. It explains it all in laymans terms and gives good examples etc. I have passed https://www.archyde.com/how-do-bookkeeping-and-accounting-services-affect-the-finances-of-real-estate-companies/ my level 2 bookkeeping but wish i had bought this book at the same time! If i ever need to learn or have a better understanding of a subject i will buy a DUMMIES book.
Whether you're just starting out with bookkeeping or a bookkeeper who needs to brush up on your skills Bookkeeping For Dummies sets you up for success. Though it doesn’t focus only on bookkeeping, general accounting knowledge is important for small businesses, and it can help with your bookkeeping. With Bookkeeping and Accounting All in One For Dummies by Jane Kelly, you can learn the foundations of accounting and bookkeeping. In fact, this combines six books in one to let you access all the important information in a manageable way. If you’re new to running a small business, you may also be new to organising your own finances.
● Understand mergers and acquisitions, free cash flow, and statement analysis. ● Explore common concepts financial professionals use to compile reports. Liabilities include everything the business owes to others, such as supplier bills, credit card balances and bank loans.
There are many online guides; our favourite is the accounting coach. It includes both free and paid-for courses and can include certificates of achievement. The author is not an accountant but has explained everything in a way that a business owner can understand. There is also a website that accompanies the book, giving more examples and a quiz. There are a lot of bookkeeping resources on the internet about accounting and bookkeeping, but sometimes having everything in one place is helpful. You can also look at a book while having the internet open.