AUTO ENROLMENT

There are choices to be made.

Make sure you're making the right ones at the right time.

f
TAGS
H

Useful information on Value Added Tax (VAT)

VAT  (or Value Added Tax to give its full name) was introduced in the UK in 1973 and is the third largest source of government revenue  after income tax and National Insurance.  VAT is levied on the sale of goods and services by UK businesses.

The standard rate of VAT is currently 20% and this rate has been in place since 4 January 2011.   This rate covers most goods and services.

The other rates are:

  • Reduced rate of 5%, which covers some goods and services, such as domestic fuel or children’s car seats.
  • Zero rate, examples of which are children’s clothes and some foods.
  • Some items are exempt from VAT altogether, such as postage stamps and insurance.  No VAT is charged on anything that is outside the scope of the UK VAT system.

VAT is charged by a business at the point of sale of goods and services.   The threshold for a business to register for VAT is when the VAT taxable turnover exceeds £85,000 (April 2017).   (Taxable turnover is the total value of everything sold that is not exempt from VAT.  There are, however, different thresholds for buying and selling from other EU countries).

To register for VAT, a business will need to contact HMRC if the business goes over the VAT threshold in a rolling 12 month period.  In fact, a business should monitor its turnover regularly  to check whether it will go over the threshold.   It is generally possible to register with HMRC and it is possible to appoint an agent such as Cashtrak to submit VAT returns on behalf of the business.

The de-registration level for a business is less than £83,000 (April 2017).  

Please do view our full article here.



 

This product has been added to your cart

CHECKOUT