Advice re assessing accounts for vat

[AllyB]

Hi

I am new here so bear with me.

I am looking for some advice re VAT. i recently got involved in the family business, i now have a year and half of accounts to go through, get last yrs accounts in to the accountant for finalising and i think we may have reached the VAT threshold and need to register. Its a case of where do i start really, there is so much to do and i have an appointment with my accountant next week to discuss. However i would like as much sorted before then as possible as it will only be for an hour.

Its a Hair & Beauty salon so there are no sales invoices, customers pay immediately by cash cheques or card, we also have a retail element selling products. What is the best way of getting started? and how long do i have before i need to sort the vat out? i have a feeling they may have hit VAT possible October or November. Please help, very much appreciated, drowning in papers here!

:| Ally

 

[Nicster]

Hi AllyB,

Don't worry! Just take a step at a time.

Get your accounts up to date first and whilst this is being done, it can be determined if you have reached the VAT threshold.

If that is the case, then you will need to register - as per another post on here today, I would register online, as its quicker and easier.

Generally, the first VAT return may cover a longer period than 3 months, it depends when you register.

Where are you based? Consider using a bookkeeper to get your accounts up to date as it may work out cheaper than using your accountant.

The bookkeeper should be able to register you for VAT aswell.

PM if you need more info (or a good bookkeeper in Essex ;-))

 

[dhawall]

Well, ideally you ought to have registered within 30 days of having breached the VAT limit - but that's nothing to worry so much - you'll have to pay some penalty if your registration is after 30 days. If your turnover is less than 187,000 have a look at the "Flat rate scheme" offered by the HMRC

 

[AllyB]

i am based in Newcastle so Essex is a bit far lol . i honestly dunno where to start, i considered gettin a copy of sage and batching it all on there but its been a few years since i used it and not sure i have time to learn it all over again in a week *sobs*

i was thinking the best thing to do would be firstly to prepare last years books that takes me up to august then from aug 07 is this yrs the VAT thing terrifies me iv never done that before, day to day account i can manage ok.

Im probably gonna start making weekly piles on my floor to sort out the paper work and go from there. can't say i relish this challenge :/

Ally

 

[maxine]

Hi Ally

Good luck. I feel for you Sage is really easy to pick up in my opinion (like riding a bike) but maybe you could call your accountant and see what software they use so that you can just email your stuff over for them to change and email back to you as might be a bit easier if working off the same software.

Regards
Max

 

[Kent Accountant]

I would suggest that the first thing you need to do is to establish whether or not they should have registered for VAT.

As this is a retail business, you need only worry at this stage about the gross daily takings i.e. the total of hairdressing charges, chair rents if any and retail sales of products. Get a monthly total for this figure.

At the end of every month, add up the totals for the previous 12 months or less if you have not been trading for 12 months. The VAT registration threshold was £61,000 until 1st April 2007 when it increased to £64,000. If any of your 12 monthly totals exceed the registration threshold, you will be given a month's leeway and will be liable to register from the first of the following month. For instance if you exceeded the threshold in the 12 months to the end of October, your registration date will be 1st December.

This should be relatively simple to work out and at least you will then know the starting date. Clearly once you have done that, you can then sort through the expenses and work out what input tax is recoverable. Your accountant should be able to help you here, but it will assist both of you if you know if registration is required.

From what you say, it appears that the 07 SA return is also late and you will need to get this done as soon as possible

 

[AllyB]

thanks for all the advice guys.

Where do i start the replies.

1. i assume SA is self assessment? yes they are done and in before the deadline.
2. The refurb took place in June so the takings increased from then i think we probably hit VAT in Oct or Nov. but without doing the accounts over 12mths not sure yet. I'm thinking of looking at it maybe aug-aug which is our financial year, then work forward from there. god its really daunting all this!
3. i am 100% sure registration is required just not sure at what point we hit it. i am hoping its not too far gone and can get away with registering in February.

What is the best way to tackle this, do i start with one pile of papers and separate them into weeks then work week to week reconciling as i go both cashbook and on the PC or should i just work one area at a time. if this lot landed in your office guys how would you start?

Thanks for all the help very much appreciated

Ally

 

[DuaneJackson]

First thing I would do is reconcile month by month (or week by week if high volume). Ensuring everything is entered correctly will be the basis of everything else you do.

 

[dhawall]

Start weekly : with the service sales and the product sales seperated- i.e. first workout your total sales -attributable to 1. hair dressing & beauty services and 2. sale of ' retail' products

 

[AllyB]

Some good advice there. My worry is that we should have been reg'd for VAT a while ago and face penalties once this is all sorted :/

 

[adam sidat]

as Bob (Kent Accountant) mentioned - do you have chair rents - if this operated properly between the different hairdressers, you may not have to register for VAT - if you email me, i can let you have a simple excel spreadsheet on which you enter your weekly sales and it will tell you when you you ought to have registered for vat
for book keeping, sort all your purchases / expenses into weekly order (you mention you have a cash book - then sort them into the same order as the cash book - this should be sufficient for your accountant to prepare vat returns / accounts from providing it is accurate) - if you want to DIY then after sorting into weekly batches, enter on to a spreadsheet - column headings to be date, name of supplier, total invoice amount, vat amount and goods amount.
goodluck

 

[AllyB]

Well I'm getting there...

Sorted most of the papers out now into order, sorted statements of full list of debits and credits for suppliers. entered upto week 27 of accounts income and expenses. half way there for the yr end ones not started on VAT yet tho.

thanks for all the help guys much appreciated

Ally

 

[AllyB]

Put them in today!!!! going to go purchase a crate of wine and get very drunk now im freeeee

Thanks guys for all the help much appreciated. just gotta wait and hear back from the accountant now, dreading doing the vat now though :/

watch this space...

 

[amanda123]

Hi there

I am a new user here and I am employed by a recruitment agency who cannot pay me as they are not a PAYE company so I am paid by another company and they charge me £30 a week for them to pay me? I have to fill in an expenses form each week and pass this to the company. I am totally and utterly confused about what I can claim for and what I cannot. For example I am allowed to claim 5.50 a day for lunches (without a reciept) but I seem to be able to claim for accommodation also, if I provide reciepts?
I was told that the reason for this is that I require to 'relocate and work on site (london) for the purposes of the job' but I still dont get it!!!!!
any advice would be appreciated!!!

Amanda