Get Your Small Business Vat-Ready – Minus The Headache

date

12-Jun-2019

For most small businesses in the UAE, value-added taxes (VAT) have been a challenge to understand and navigate. But if your startup is thriving and generating revenue, it is likely you will soon cross the registration threshold of AED375,000 per annum, and need to get your accounting systems and processes VAT-ready, without impacting your cash flow or operations.

Here are some practical and easy-to-implement tips to get your business ready.

Test. If you are a small business that still uses manual processes like spreadsheets to calculate and record VAT, consider creating dummy sheets and invoices to ensure you are processing the additional VAT correctly and that you can process transactions inclusive of a 5% VAT charge.

Automate where possible. Cloud-based, automated accounting solutions, like Sage Business Cloud Accounting, are VAT-compliant and are updated constantly to adhere to the latest regulations. Businesses using these solutions don't have to worry about staying on top of the different VAT rates because the system will automatically generate the correct VAT invoice, quote and debit or credit note.

Educate your colleagues. Understanding VAT-compliance should not be the sole responsibility of the finance team. It's crucial that all team members know how VAT affects their function, and how to steer clear of breaking the law.

Adjust your pricing. The VAT law states that displayed pricing and adverts must include VAT (unless the product is zero-rated). Some small businesses might want to close shop for the day to adjust their shelf and online pricing to reflect the VAT rate.

Get reporting ready. Using an automated accounting solution can help you with reporting, but if you are using manual processes, do consult an accountant to make sure you are not over or under-reporting VAT on your reconciliations of input and output tax.

Complying with the VAT rate can be a massive administrative task for businesses of all sizes – and they don't have much time to prepare.
About Sage
Sage (FTSE: SGE) is the global market leader for technology that helps businesses of all sizes manage everything from money to people – whether they're a start-up, scale-up or enterprise. We do this through Sage Business Cloud - the one and only business management solution that customers will ever need, comprising Accounting, Financials, Enterprise Management, People & Payroll and Payments & Banking.
Our mission is to free business builders from the burden of admin, so they can spend more time doing what they love – and we do that every day for three million customers across 23 countries, through our 13000 colleagues and a network of accountants and partners. We are committed to doing business the right way and giving back to our communities through Sage Foundation.
 

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