Running a business is busy enough without decoding VAT legislation. The rules change, sector quirks matter, and HMRC expects clean digital records. That is why experienced VAT accountants make a real difference – we interpret the law, reduce risk, and keep your returns accurate while you focus on customers. With 2.73 million VAT and/or PAYE-registered businesses in the UK as of March 2025 (ONS, 2025), many owners now face stricter digital requirements under Making Tax Digital for VAT and new penalty regimes. At the same time, the VAT registration threshold remains at £90,000 from 1 April 2024, catching growing firms sooner than expected (HMRC, 2024).
We help owner-managed businesses in construction, manufacturing, hospitality, ecommerce and startups understand what applies to them, when to register, and how to reclaim VAT correctly. Good VAT advice also improves cashflow – getting invoices right, choosing the correct method for partial exemption, and avoiding costly errors on property or international transactions. In this guide we show how VAT accountants handle the tricky areas, what to expect from a practical review, and where the biggest pitfalls lie so you can act early and avoid sleepless nights.
What specialist VAT accountants look at first
Before anything else, we confirm your obligations and risks. That includes registration timing, sector rules, and the records HMRC expects.
- Registration threshold: Monitor rolling 12-month taxable turnover against the current £90,000 limit and plan for the effective date of registration.
- Digital records (MTD): Keep VAT data digitally and maintain digital links from source to return – spreadsheets are fine if linked correctly.
- Filing behaviour: Align return periods with cash cycles, and consider cash accounting or annual accounting where suitable – both can smooth cashflow.
We then profile your supplies and purchases to map VAT liability, recovery and evidence. For many SMEs, a quick scoping session flags 80% of issues. The remaining 20% lives in specialist territories – partial exemption, property, international services, reverse charges and schemes.
Partial exemption and reclaim optimisation
If you make both taxable and exempt supplies – for example, a manufacturer with some exempt land rentals or a charity with mixed income – you may not recover all input tax. VAT accountants build and test a method that is fair, proportionate and defensible:
- Standard method: Use the default taxable-to-total supplies ratio; simple but sometimes unfair.
- Special method: Propose an alternative that better reflects use – for example, floor area or staff time – and seek HMRC approval where required (HMRC, VAT Notice 706).
- Annual and in-year adjustments: Reduce volatility with forecasting and monthly tracking – no last-minute surprises at year-end.
The goal is to maximise legitimate recovery, not to push the line. A well-documented method with clear working papers is your best defence in a review.
Land and property: Getting opted tax and evidence right
Property is a high-risk area. Rent can be exempt unless an option to tax is in place, and transactions often involve large amounts of input tax:
- Option to tax: Make sure elections are valid, notified and on file before relying on input tax recovery. Keep contracts and correspondence together.
- Capital goods scheme: Track adjustments for buildings and high-value assets over the adjustment period; small errors here add up.
- Conversions and mixed use: Apply the correct reduced or zero rates where available, and keep evidential documents tidy.
This is where VAT accountants save money – and stress – by aligning contracts, elections and evidence before the deal completes, not after.
International services and the place of supply
Selling or buying services across borders triggers place-of-supply rules. Errors here cause assessments and double taxation:
- B2B services: Usually where the customer belongs; often no UK VAT, but you may need to apply the reverse charge in the UK on received services (HMRC, Notice 741A).
- B2C and sector exceptions: Electronically supplied services, land-related services and admission to events have specific rules – getting these wrong affects pricing and compliance.
- Evidence of customer location: Collect VAT numbers and commercial proof; your file should show why VAT was or was not charged.
VAT accountants design invoice and onboarding steps so your team captures the right evidence every time.
Construction and the domestic reverse charge
Since 2021, many construction supplies fall under the domestic reverse charge for building and construction services. That changes invoicing and VAT flow:
- When it applies: Most B2B supplies within the scope of CIS where both parties are VAT-registered and not end users. Invoice with no VAT, stating the reverse charge applies.
- Cashflow impact: Contractors no longer collect VAT on affected jobs – plan for the shift.
- End-user statements: Obtain and retain end-user confirmations where appropriate to avoid misapplying the reverse charge (HMRC, 2025).
We build checklists and sample wording so site teams, estimators and finance are aligned.
VAT groups, margin schemes and sector specifics
Group VAT registration can remove internal VAT charges and simplify filings. Margin schemes can reduce VAT on second-hand goods, art and antiques, if used correctly:
- VAT groups: Combine eligible UK entities to account as one; good for cashflow and simplification, but joint and several liability needs careful review.
- Margin schemes: Apply only to eligible goods, keep stock-book records, and calculate VAT on the margin – not the full selling price (HMRC, Notice 718).
- Hospitality and ecommerce: Watch mixed rates, package pricing and platforms acting as deemed suppliers – small settings often create big errors.
Experienced VAT accountants will only recommend these options if records and controls are strong enough to withstand scrutiny.
MTD, digital links and audit-ready records
MTD for VAT now covers all VAT-registered businesses. HMRC expects digital records and uninterrupted digital links from source transactions to the return. Copy-and-paste is not a digital link. We help clients select software, structure ledgers and build a tidy audit trail. We also run penalty-risk checks and set up review calendars.
- Quarterly reviews: Reconcile VAT control accounts and suspense items.
- Sample testing: Check high-value and unusual items each period.
- Evidence packs: Save VAT numbers, option-to-tax letters, place-of-supply evidence and reverse charge statements in one folder.
This keeps returns defendable and speeds up HMRC queries. With VAT forecast to raise about £180.4 billion in 2025–26, making up roughly 14.7% of all receipts, the stakes for getting VAT right remain high (OBR, 2025).
Case examples we see every month
- Ecommerce startup: Missed overseas customer evidence, charged UK VAT incorrectly. Fix: added VAT number validation and country-evidence steps; corrected returns and recovered overpaid VAT.
- Construction supplier: Applied standard VAT instead of reverse charge. Fix: updated customer onboarding with end-user declarations and invoice wording; improved cashflow visibility.
- Mixed-use property company: Claimed full input tax without a method. Fix: implemented a special method with quarterly monitoring and an annual adjustment; reduced exposure and recovered more input tax legitimately.
If these scenarios sound familiar, we can help. Start a conversation via our contact page.
How VAT accountants reduce risk and improve cashflow
Working with experienced VAT accountants is not about theory – it is about fewer errors, fewer penalties and better cashflow. Our typical plan starts with a short discovery call, then a document and transaction review. You get a clear list of issues ranked by impact and a practical fix list your team can implement. We train staff on invoice wording, build partial exemption calculations, and set up digital links so future returns are safer and faster. We also stand beside you with HMRC – answering questions, preparing disclosure where necessary, and addressing disagreements professionally.
The risks are real: wrong VAT rates on property, poor evidence for zero-rating, missing reverse-charge wording, or broken digital links can all lead to assessments. But most problems are avoidable with simple controls and periodic checks. If you are scaling and approaching the £90,000 threshold, trading internationally, or dealing with property, a short VAT review pays for itself quickly.
Talk to us about a focused review with VAT accountants who understand your sector and day-to-day realities. For practical support and a clear plan, get in touch – speak to our VAT accountants today to book a VAT review for your business.
