- An indirect tax
- Charged on most goods and services supplied within the UK
- Is borne by the final consumer and
- Collected by businesses on behalf of HM Revenue and Customs
VAT is charged by taxable persons when they make taxable supplies in the course of their business. VAT is not generally charged on non-business transactions
When do I need to register for VAT?
When a business reaches a set annual turnover level, then it must register for VAT (sales).
If turnover is below this limit, the business can, if it wishes, register voluntarily.
The current VAT threshold for registration is £85,000 and deregistration is £83,000 (correct as from 1st April 2017)
If a business is registered it must
- Charge VAT on its sales or services to its customers
- Recover the VAT charged on its purchases and expenses rather than having to bear costs as part of the business.
In the UK, VAT is currently charged at two main rates, the standard rate of 20% and the zero rate 0%. The zero rate of VAT applies to items such as food, drink, books, newspapers, children’s clothes and most transport.
Usually Clients need to submit a VAT return to HMRC Revenue and Customs (HMRC) every 3 months. This period is known as your `accounting period`.
The VAT return records information about
- Your total sales and purchases
- The amount of VAT you owe
- The amount of VAT you can reclaim
- What your VAT refund from HMRC is
If you are looking for a VAT returns accountant who is reliable and accurate and can offer exceptional quality at an affordable price then contact one of the team at Harrigan Accountancy Ltd.
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