Liverpool Accountants Small Business VAT Help: What is the VAT Rate you Need to Be Charging

Even the longest trading businesses can sometimes get a bitmixed up when it comes to VAT. Charging VAT when it isn't due or charging the wrong rate are common mistakes when you offer new or different products to customers.

Andrew Keates urges all businesses to check. Are you charging the right amount of VAT on all goods and services to customers.

Businesses and Charging VAT

There are three different rates of VAT and you, as a business owner, need to ensure that you charge the right amount.

Standard Rate The majority of goods or services are charged with standard rate. Charge this unless your goods or services are classed as reduced or zero rated.

Reduced Rate Thisis a little more complicated as you charge this rate depending on the item being provided, but also depending on the circumstance of the sale. The following examples display this: Children's car seats and domestic fuel or power are always charged at 5%. Mobility Aids for older people can be charged at a 5% VAT rate, but only if they are for a person aged over 60 and the goods are installed in their home.

Zero Rate Zero rated means that the goods are still VAT-taxable, but the rate of VAT that you must charge your customers is 0%. Zero rated goods include, books and newspapers, motorcycle helmets and children's clothes and shoes. It is important to note that as Liverpool Accountants, Andrew Keates has seen mistakes happen where Zero rated VAT has not been recorded in VAT accounts. You must record it and report it on your VAT return.

Determining your VAT

Different goods and services have different VAT rates, so please consider is who buying them, where they are provided, how they are presented for sale, the precise nature of the goods or services and whetherthey are provided with other goods and services. Other conditions may also apply.There are different rules regarding VAT for certain trades, These can all affect how you account for VAT and how much VAT you must pay and can reclaim.

For example, the food and drink industry alone, has some variation. For human consumption, food is generally zero tax rated. Yet,alcoholic drinks, sweets, confectionary, crisps, soft drinks, amongst othersare taxed at the standard rate.

 Furthermore International Trade Goods exported outside the EU or sent to someone registered in another EU country are zero rated subject to conditions. You can read more about VAT on goods sent overseas, and access and extended list of goods or services in different fields and their VAT rates on this link.

Equal Pay Audits From October 1st 2014 

The Equality Act 2010 (Equal Pay Audits) Regulations 2014 took effect on October 1st 2014. The regulations oblige tribunals to order employers found to be in breach of equal pay law to carry out equal pay audits in certain circumstances. New businesses or micro businesses (no more than two employees) are exempt.

An equal pay audit involves the publication of relevant gender pay information, identify any differences in pay between men and womenand the reasons for those differences. It should also include the reasons for any potential pay breach identified by the audit and set out the employer's plan to avoid breaches occurring or continuing. If an employer fails to carry out an audit when ordered to then they may have to pay a fine of up to £5000. 

Time Off for Ante Natal Appointments for Partners of Pregnant Women. 

On October 1st 2014, it was made legal that fathers and partners of pregnant women (including those who work within an agency)  can take a limited amount of time off to attend ante natal appointments with the pregnant woman. The right also extends to parents in a surrogacy arrangement. The time off is unpaid and can be taken for two appointments lasting up to six and a half hours each time. Employers may not grant permission for the time off if it is reasonable to do so.

There isn't a qualifying period for employees to be entitled to this right but it is different for agency workers. Agency workers must have completed a 12 week qualifying period, not have taken on a different role with that hirer and not have had a break between assignments.

If unreasonably refused the time off, an employee or agency worker can complain to an employment tribunal. These claims must be made within three months of the refused appointment date. If it is found to be unacceptable on behalf of the employer, then the remedy is compensation amounting to twice the amount of the employee/ agency worker's hourly salary for each hour that they would have been absent.

Furthermore, pregnant agency workers will also have the right not to be subjected to any detriment by any act or failure to act, by the temporary work agency or the hirer because of time taken off for ante natal appointments. 

Liverpool Accountant Andrew Keates' 5 Tips to Improve your Business as the Government Announces Plans to Support Failing Businesses. 

Core suppliers will be forbidden from cutting off necessary services to businesses during rescue talks in a new government guarantee that will safeguard companies whilst in administration, a scheme our team at the leading Liverpool Accountants feels is very admirable.  On February 9th 2015, proposals were laid in parliament that established that from October, suppliers of IT, water, gas,electricity and communication services, will be prohibited from cutting off supplies or charging premium rates whilst practitioners attempt to find a workable solution to save a business.

Suppliers will be guaranteed payment ahead of others owned money for services supplied during the rescue period and can request for guarantees of payment from the insolvency practitioner.

Suppliers will also be able to submit an application to the court to cease their contract on the grounds of 'hardship' and assistance will be issued to practitioners that they should make contact with essential energy suppliers at the 'earliest possible time' following their appointment to discuss what supply they would anticipate to use.

As a Liverpool accountant Andrew Keates and Associates have helped many now thriving businesses through difficult times with their expertise and services. We know how having continued IT and energy services are essential for businesses to continue trading whilst they consider their future.Andrew Keates values all our clients and are able to help with all payroll,HMRC taxes, and other regular accounting a business needs to do. By us taking on this responsibility for you, business owners can start to spend time on the day to day running of the business and doing what really matters. Here areAndrew Keates' Expert 5 Tips to avoiding business failure.

1. Seek help with a strong accountancy team. Andrew Keates and Associates are Liverpool Accountants but do work nationally. We can help with book keeping, company accounts, payroll management and many more services. You can contact us withany  enquiries on 0151 227 5353 or email at

2. Develop a positiveoutlook. Set realistic goals but also goals that will enable continuous growth. Plan ahead and take considered risks. Your accountant at Andrew Keateswill help you to plan and offer advice with financial decision making.

3. Work on a newbusiness plan. Find out what is causing failure and work on a long term strategy. Again your accountant in Liverpool can help with this one.

4. Look for the bestbusiness partners. A business cannot succeed with your efforts alone so seek to find the best business partners, both investors and suppliers.

5. Boost moralewithin the business. Give staff a new lease of motivation by always payingthem on time (Andrew Keates does offer payroll management services) and offer them incentives. Make them part of the businesses growth by consulting them about change and valuing their opinions.