Whether you have a big business or a small business, every business time is so valuable. And If you will waste it, then probably you're losing the opportunity to make more insights. That's why It's essential to make life as simple and easy as possible, and you can do so by Paying VAT. As we all know, Paying VAT is one of the things many companies have to do – but there is no justification why this takes so much of your time.
If you want to know everything about the pay vat online. Here we have done the heavy lifting for you to acquaint you with VAT, how you can register your VAT number, and how you can pay VAT online. Let's deep dive in:
What is VAT?
Value Added Tax is a government tax that is used to generate revenue to boost the economic state. This is an indirect tax on the consumption of goods and services, except for those which are either zero-rated (food or essential) or excluded (exports, money loans, property transactions.) by UK firms. A company further pay HMRC VAT by calculating how much VAT they have charged customers compared to the amount they have spent on their purchases.
As a company, you're legally required to register for VAT when your annual turnover gets up to £82,000. You should always sign up before you get to this amount if you want – something that's particularly useful if the majority of your transactions are with VAT-registered companies.
When you are registered, you can charge consumers an extra 20% on all goods and services you offer – known as the 'output tax.' E.g., a commodity costing EUR 300 could potentially be sold for EUR 360 once VAT has been added on.
If you buy from a VAT-registered seller, you will also be paying a 20% mark-up, classified as input tax. At the end of each year, you would have to measure how much output tax you received and deduct the amount of input tax you pay. The remaining number will then be submitted to the HMRC.
Now you will be asking a question to yourself when you need to register for VAT, so you can only register for VAT if you are a company providing taxable supplies. HMRC pay VAT describes a company as a continuous activity involving payment for the provision of goods or services in cash or some other payment form, such as in-kind or barter. Taxable supplies include everything you do in your company, not just those items you do in the ordinary course of your day-to-day business.
Some industrial supplies, such as money loans and property transactions, are not taxable and are considered exempt supplies. It is essential to understand if you make any exempt supplies, as this will impact the amount of VAT that you can recover on the items you purchase for your company.
How to Register a VAT Number
Contact websites that can register your VAT number, or you can obtain the appropriate forms from your accountant and register by post.
Obtain the following details in advance:
- Your Exclusive Tax Reference—the 10-digit number you got when you registered to pay Corporation Tax.
- Information about your business bank account.
- Your company name and registered address.
- Information of any associated business over the last two years.
After registration, you will receive a Certificate of Registration (VAT4):
- Your VAT registration number
- The date on which you need to send your first VAT return and payment
- Your registration date
You can quote the VAT registration number on every receipt or invoice regarding which VAT applies to goods and services.
How to Pay VAT Online
As you now know what VAT is and how to register a VAT number now, you may wonder if we can pay VAT online? If you are also one of them, then the answer to your question is yes, you can pay your VAT bill online. So
To Pay VAT bill, you will require your VAT registration number. This nine digits number can be found in your digital VAT account and on your VAT registration certificate. If you get this reference number incorrect, it can delay the receipt of your payment being received by HMRC, and always bear in that you need all the information in your hand.
Modes Of Online Payment
1. Debit or credit (have your details ready):
- Corporate debit card: Non-refundable fee
- Corporate credit card: Non-refundable fee charged
- Personal debit card: No fee
- Personal credit card: Not allowed
2. Online banking:
- Faster payments: Generally happens on the very same day or the next day
- CHAPS: The CHAPS (Clearing House Electronic Payment System) bank-to-bank technology ensures that you can make transfers on the same day as long as you make the payment under your bank's time limit.
- Bacs: Bankers Automated Clearing Services (Bacs) is a transaction between bank accounts that requires three working days to clear up.
Yeah, and if you're on the HMRC website, you'll have to accept cookies in your web browser to make an HMRC vat payment.
Conclusion
Hopefully, this guide has helped you to shed some light on how to pay VAT. As you know, having a registered VAT account and taking this tax into account when purchasing and selling is a breakthrough in many organizations' growth. It can make it not just a seamless experience but a beneficial one to take advice on which system to sign up for and get efficient systems in place in plenty of time to manage the additional calculations and administration.
In case you’re running a dropshipping business, you’ll be fortunate to know about SaleYee.com. It is a dropshipping platform that provides you with a free delivery service and the best in all for customer support. The platform serves both non-VAT-registered users and VAT-registered users.
