One problem many business owners face when it comes to VAT Returns is that they get a big shock when they find out how much VAT they have to pay!
On the 23rd of the month (or close to the deadline) they receive the figure and it’s a big chunk of cash.
In a fast-growing business, VAT can increase substantially from month to month. If you paid €20k in January, you could be paying €40k in March.
Need some help staying on top of your VAT Returns?
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The Certainty of Taxes
Benjamin Franklin, whose likeness appears on US dollar bills, once famously said;
"There are only two certainties in life. They are Death and Taxes".
Even though that was said a few hundred years ago and despite the massive changes in the world it still holds true today.
Direct and Indirect Taxes
In the modern world taxes can be divided into two broad categories, which are Direct Taxes and Indirect Taxes.
The direct taxes are directly deducted from your income by the government while the indirect taxes are levied on the goods and services that we consume as customers – either as individuals or businesses.
VAT (Value Added Tax) is a tax levied on goods and services at the point of purchase and as such is an indirect tax.
The basic formula of VAT for businesses is as follows;
- My business pays a fee (VAT) while purchasing goods or services from my suppliers.
- My business charges a fee (VAT) when selling goods or services to other businesses or individual customers.
- Any surplus between the VAT my business pays suppliers and the VAT my business charges customers is paid by my business to the government on bi-monthly basis.
Whilst this sounds straightforward, in reality there are many schemes, clauses, exemptions and other variables which make VAT extremely complicated.
Read More About VAT;
VAT Service for Irish Businesses
Jetbooks gives you the confidence that your VAT Returns
will be processed correctly on time, every time!