What is VAT?
Value Added Tax (VAT) is a tax charged on the majority of goods and services provided by
UK VAT registered businesses. Sometimes also referred to as ‘Very Awkward Tax’ it is also
charged on goods and certain services imported from countries...
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What is VAT?
Value Added Tax (VAT) is a tax charged on the majority of goods and services provided by
UK VAT registered businesses. Sometimes also referred to as ‘Very Awkward Tax’ it is also
charged on goods and certain services imported from countries outside of the EU, and
brought into the UK from other EU countries.
VAT registered businesses charge VAT when making a sale however are able to reclaim VAT
they have paid when buying goods and services.
There are three current rates of VAT:
• Standard rate – 20%
• Reduced rate – 5%
• Zero rate – 0%
There are some goods and services which are exempt from VAT.
If a business provides goods and services which are subject to VAT (taxable supplies) and it’s
turnover for the previous 12 months has exceeded the current VAT threshold of £73,000 it
must register with HM Revenue & Customs (HMRC). Businesses not obliged to register can
do so if they wish.
The Local Bookkeeper assists many customers with VAT queries and has helped many to
register w
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