VAT challenges for a growing business

VAT challenges for a growing business

Rapid growth in any company is something that most business owners would want to be associated with. Ultimately it means you’re doing something right, but it can also throw up its fair share of challenges. Businesses undergoing rapid growth will need to acknowledge that they are more likely to run into some problems and that they will need VAT advice from experts within the field. To help you better understand the problems, we’ve illustrated a few of the issues a growing business can encounter.

International expansion

If your company is expanding abroad, then sales of your goods or your services to international customers may mean you are required to comply with regulations in place in those countries. This can include VAT registration and accounting for VAT. If you were to charge admission for an event held in a certain country such as a conference, you would be required to undergo a registration process in the country where the event is held. It’s the same with VAT. So, if you plan on selling goods to private persons in an EU country for example, and the amount of goods you’re selling reaches a certain threshold, you will be required to register your business in that country.

Unnecessary exposure

As your business starts to grow, it’s highly likely that you will be managing multiple income streams. During times of growth it can become easy to ignore the income streams you deem as being less significant. If left unreviewed, it could cause unnecessary exposure. As an example, you may treat income as zero-rated, whereas it should be exempt. If you fail to identify the difference between the two, then you could end up with an unexpected and rather costly VAT bill.

Transactions, mergers and acquisitions

Any company that is growing is likely to make property transactions as well as acquisitions and even mergers. All of these will need to be carefully handled in order to avoid exposure. Recovery of all the VAT involved could be incorrect, which may mean your business faces a VAT cost as well as a penalty. When it comes to property VAT plays a significant part, so it’s vital to have a thorough understanding of all the potential VAT issues.

If your business is expanding and you want to stay in control of your VAT, please don’t hesitate to contact us today. We’ll be more than happy to offer you advice on any issues you may have.

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