Registering for VAT- is this expensive?

[kropotkin]

I started doing some medicolegal report work a few years ago and am now going to need to register for VAT.
I got an accountant this year, and they want to charge me £450+vat to set it up (additional to administer/do returns). It looks fairly straight forward on the HMRC website, but what do I know.

Is this reasonable, or should I just take the time to do it myself?

 

[Leafster]

Do you know what's included in the £450+VAT? If it's just collating the info to complete the VAT Registration with HMRC, I'd say that's way too much.

If it includes setting up an MTD for VAT compliant bookkeeping system including incorporating your cumulative data then perhaps it's just a little high *.

* I don't know your existing set up so it's going to be a little difficult to assess what might need doing.

 

[DaveCinzano]

I started doing some medicolegal report work a few years ago and am now going to need to register for VAT.
I got an accountant this year, and they want to charge me £450+vat to set it up (additional to administer/do returns). It looks fairly straight forward on the HMRC website, but what do I know.

Is this reasonable, or should I just take the time to do it myself?

Unless you're going full throttle on this, rather than as a side hustle, I'd say bodge it together yourself.

But when you say need to register for VAT, what do you mean? Is it likely to get close to £85k turnover? Or (e.g.) is the business supplying you with work insisting you be VAT-registered?

 

[Sue]

I started doing some medicolegal report work a few years ago and am now going to need to register for VAT.
I got an accountant this year, and they want to charge me £450+vat to set it up (additional to administer/do returns). It looks fairly straight forward on the HMRC website, but what do I know.

Is this reasonable, or should I just take the time to do it myself?

I assume you'd be on the flat rate scheme in which case i wouldn't pay for them to do your returns. I did mine for years and it was literally a 15 minute job once a quarter (and at least five mins of that was trying to find my Gov Gateway details ).

 

[MickiQ]

My accountant registered me for VAT as part of the process of setting me up as a business. If you are going to be running a business that involves collecting and paying VAT then get an accountant it will make your life a LOT easier and mine has (most years) saved me more money in tax than they have charged me.

 

[Sue]

My accountant registered me for VAT as part of the process of setting me up as a business. If you are going to be running a business that involves collecting and paying VAT then get an accountant it will make your life a LOT easier and mine has (most years) saved me more money in tax than they have charged me.

Assume you're not on the flat rate scheme because that's like one easy calculation and a simple online return to complete quarterly.

 

[Leafster]

Assume you're not on the flat rate scheme because that's like one easy calculation and a simple online return to complete quarterly.

If you mean filing your VAT Return through your HMRC online VAT account, this is no longer possible. It ceased on 1st November 2022.

You now need file your VAT Returns through MTD for VAT compliant software.

 

[Sue]

If you mean filing your VAT Return through your HMRC online VAT account, this is no longer possible. It ceased on 1st November 2022.

You now need VAT your VAT Returns through MTD for VAT compliant software.

I de-registered for VAT a few years ago. Presumably it's now more complicated than just completing four boxes or whatever on a form? Why would they do this? Assume it's to do with fraud or something?

 

[kropotkin]

Unless you're going full throttle on this, rather than as a side hustle, I'd say bodge it together yourself.

But when you say need to register for VAT, what do you mean? Is it likely to get close to £85k turnover? Or (e.g.) is the business supplying you with work insisting you be VAT-registered?

Thanks for the replies.

The accountant said I need to monitor what I'm invoicing for (not monies received for invoices sent) and monitor when that amount goes over 85k. This has happened this month, so will be significantly over by the end of the year since I started the company (Feb).
He says I need to register now and start invoicing from when I register to include Vat.

 

[MickiQ]

Assume you're not on the flat rate scheme because that's like one easy calculation and a simple online return to complete quarterly.

I am now I wasn't initially though it seemed to take ages to get me onto it.

 

[kropotkin]

My accountant registered me for VAT as part of the process of setting me up as a business. If you are going to be running a business that involves collecting and paying VAT then get an accountant it will make your life a LOT easier and mine has (most years) saved me more money in tax than they have charged me.

Thanks.
It does all seem expensive to me- I found doing a tax return pretty easy before I started a company, yet they charged me £700.
As you say, the vat is an added complication and I have no expertise in this.

 

[sleaterkinney]

When you send invoices out, do you add VAT?. It does seem excessive for a simple calc. It depends on whether you want to do that stuff yourself.

 

[kropotkin]

When you send invoices out, do you add VAT?. It does seem excessive for a simple calc. It depends on whether you want to do that stuff yourself.

I will have to from now apparently

 

[rubbershoes]

Can't help you with this question, but good luck with the medicolegal work. For some disciplines it's very lucrative. Steer clear of the agencies if you can as they take a massive cut

 

[DaveCinzano]

Well congrats on your order book!

For writing-based work, unless there are a lot of hidden business requirements, equipment, products on top of services etc, the business admin side (including VAT registration and filing) should be well within your capabilities.

I would say that it comes down to balance. If you are time-strapped (but you clearly have a healthy order book), then get the thieving accountant to do it. If you are not, then have a crack at it yourself and put the money you saved aside for a rainy day.

 

[Supine]

Remember to claim back vat on any business expenses. If you have a lot it might be worth having the accountant do it all for you.

 

[Leafster]

I de-registered for VAT a few years ago. Presumably it's now more complicated than just completing four boxes or whatever on a form? Why would they do this? Assume it's to do with fraud or something?

It's still the same summary information from the VAT Return which gets sent to HMRC but you have to have MTD compliant software to do it.

According to HMRC, small businesses aren't to be trusted to get their taxes right. HMRC believe they can't add things up or transfer information from one source to another without making mistakes so they formulated a strategy called 'Making Tax Digital' (MTD). The premise is that MTD compliant software captures all the information needed digitally as close to the original source as possible and then produces the 'correct' answer with as little intervention from the trader as possible. That's intervention in the sense of the trader using a calculator or copying information from one source to another where HMRC believe the mistakes occur. So, for taxpayers they want the software to scrape the information off their bank statements, invoicing systems, tills etc.

In reality, although some random mistakes are made in the way HMRC believe (probably just as many in their favour as in the tax payers favour), it ignores the fact that some knowledge of what to do with the captured information is needed to end up with the correct result. It also ignores that fact that some 'mistakes' are intentional to reduce tax liabilities and MTD compliant software won't directly address this.

At the moment, MTD only applies to VAT and even that had teething problems so the start date was delayed. HMRC are trying to roll out MTD for Income Tax but, again, this has been delayed because HMRC can't get everything in order to get it to work properly. The delayed roll out was supposed to start on 6th April 2024 but it's recently been announced it's going to be delayed further to 6th April 2026.

 

[tep]

I'd opt for yearly returns - then just create a simple spreadsheet to add up the vat and deal with vat on receipts. To file you just need a MTD bridging software that opens up within excel (they cost about £45 a submission) - it is very easy. Just make sure that you keep digital ie scanned copies of receipts and invoices.

 

[StoneRoad]

I would suggest DIY as much as possible.
Although if the accountant gets it wrong you then have someone to both blame & hide behind.

MTD is the biggest crock of 5h1t I have had the mis-fortune to have had to use - even worse than that there PAYE.
IMO it vastly increases the workload on small businesses - and it isn't fault-free. As in incorrect assignation of payments. for example.
[Like the subpostoffice accounting system problem that came to light recently]

 

[Supine]

Remember the accountant fee is a business expense to your company. So vat comes off and the fee is paid before tax. Helps a bit

 

[tep]

Another reasson not to use an accountant (apart from the cost) is that if they suspect that you are committing fraud (on any level) they are required by law to inform the HMRC and not to let you know that they have done so. A nervous accountant is likely to report anything to HMRC that does not like right in your invoicing - meanwhile taking your fee.

 

[Leafster]

Another reasson not to use an accountant (apart from the cost) is that if they suspect that you are committing fraud (on any level) they are required by law to inform the HMRC and not to let you know that they have done so. A nervous accountant is likely to report anything to HMRC that does not like right in your invoicing - meanwhile taking your fee.

Only 1% of Suspicious Activity Reports submitted to the National Crime Agency come from Accountants.

 

[Supine]

Another reasson not to use an accountant (apart from the cost) is that if they suspect that you are committing fraud (on any level) they are required by law to inform the HMRC and not to let you know that they have done so. A nervous accountant is likely to report anything to HMRC that does not like right in your invoicing - meanwhile taking your fee.

One of the accountant’s jobs is to help you keep your accounts legal. They are the experts in the rules after all.

 

[kropotkin]

Do you know what's included in the £450+VAT? If it's just collating the info to complete the VAT Registration with HMRC, I'd say that's way too much.

If it includes setting up an MTD for VAT compliant bookkeeping system including incorporating your cumulative data then perhaps it's just a little high *.

* I don't know your existing set up so it's going to be a little difficult to assess what might need doing.

I think they'll be asking me for my accounts (just a spreadsheet I keep updated) and inputting that- which they'll charge me for additionally.
I think i'm being overcharged but I simply can't be fucked enough to sort it out. I think i'll just pay them this year and then think about switching accountants next year. I've never done anything like this and would be highly likely to fuck it all up.

 

[Hollis]

It's abit like DIY - you probably can do it yourself. But do you really want to? The accountant - given that they do this day-in, day-out, is likely to know any 'stuff' about what you can offset etc.. Personally I don't think £450 is that excessive - but get another couple of quotes and check reviews. If you can get someone through word-of-mouth all the better.

 

[Smangus]

What's your business model? Do you have lots of different clients thatt you have to invoice to a various time during a month, or do you have a few that you work for consistently and invoice for at certain set times? If more like the former you may want an accts help, at least to set up a system that works.

Registering for VAT is easy enough online and it's information that you will only be giving your acct anyway so you might as well save your money and do it yourself.

If you affairs a reasonably straight forwards then setting up a MTD accounts pack should be reasonably easy .

 

[weltweit]

I considered registering for VAT when I faced some expensive photographic purchases with quite a lot of VAT. I decided though that the increased vigour of VAT accounting wasn't worth it. I would have have to charge all my clients VAT also which wouldn't have affected them because they were all VAT registered businesses.

It was the extra vigour of VAT accounting that put me off.

 

[tep]

I use vitaltax - just opens into your excel spreadsheet to make it MTD compliant - so that you submit VAT returns. I think the first one is free then £20 a year. There are plenty of other alternatives out there also.

 

[kropotkin]

Thanks to everyone for your advice- i've decided to just take the hit and let the accountant set it up and charge me. Have too many other things to think about

 

[Jimmy Don't]

Thanks to everyone for your advice- i've decided to just take the hit and let the accountant set it up and charge me. Have too many other things to think about

If you are charging VAT for your services, but not really buying anything with VAT on it to reclaim, ask your accountant about the the flat rate vat scheme. Can make you a little bit extra.