vat

VAT is the Tax man's trojan horse

It's just not that simple

VAT specialists for UK creatives. The3Key shields you from every confusing rule HMRC throws at you.

Manage my VAT
Incorrect VAT identified
Best Scheme for you
Accurately Filed, On Time

£90,000 is your last chance, not your first

Early registration saves money

You can choose to register before the £90,000 threshold, which is valuable if you work with VAT-registered businesses. Delaying may be optimal if you work with non-VAT registered start-ups.

What is VAT?

VAT makes you become the tax man's runner

It's never your money

VAT is a tax you collect on your invoices and your job is to pass it over to HMRC on your quarterly VAT returns. You don't pay everything you've charged, you keep some of it. Your quarterly retainer with The Tax Man.

Key Dates

Interest and Penalties are The Tax Man's Bonus

The3Key avoid these

£200 penalties for late filings. Late payment penalties starting at 3% of unpaid amounts, rising up to 10%, based on the time outstanding. 7.75% interest charged on any late payments.

Manage my VAT
When to register

Once your taxable turnover exceeds £90,000 in a 12-month rolling period or you will exceed £90,000 in the next 30 days.

Quarterly Filings

You have one month and seven days after the period-end to file the return.

Payment Dates

You also have one month and seven days to make payment. A direct debit buys you a few extra days.

VAT schemes

Wrong scheme = more money for the Tax Man

We match you to the optimal scheme

Flat Rate Scheme

Charge 20% VAT on sales and pay a percentage of total invoices to HMRC, usually 16.5% (1% first-year discount).

Standard Scheme

Charge 20% VAT on sales and reclaim VAT paid on expenses. Pay the difference to HMRC. Your bookkeeping takes a little longer.

The Decision

Monitoring your savings on the Standard Scheme versus the Flat Rate Scheme each quarter is how we prevent The Tax Man from ever catching you out.

Where it goes wrong

We don't like VAT Mistakes

Let's improve your accuracy immediately
VAT on Software

Non-UK tech & software providers, such as Adobe, should not charge you UK VAT. This isn't reclaimable VAT.

the fix:

You need to give them your VAT number and they'll stop.

VAT on rebilled expenses

Your expense not having VAT does not mean you should rebill it onto your customer without VAT charged.

The fix:

Can we treat it as a disbursement? If not, we need to collect VAT on it.

Pre-Registration Costs

VAT wasn't claimed on goods you still own 4 years and services 6 months before your VAT registration.

the fix:

We work through your historic accounting data to report these.

Flat Rate Scheme

The wrong percentage was used or VAT wasn't claimed on £2,000+ assets because it was allocated wrong.

The fix:

We check if you qualify for a lower percentage and eligible purchases.