VAT

 

VAT is charged by businesses to their customers once the voume of sales or turnover reaches £81,000. At this point, a business must register with HMRC within 30 days of this milestone.

 

VAT is charged at 3 rates depending on the types of goods or services being supplied. Most goods and services are at 20% VAT, however a 5% rate applies for items such as domestic fuel and children’s car seats, whilst items such as books, children’s clothes, most food and drink, footwear and protective safety clothing are charged at zero rate.

 

VAT returns are made and VAT paid usually online on a quarterly basis, by calculating the difference between the amount of VAT on supplies made by the business, less the amount of VAT on purchases made. There are certain flat rate schemes, cash accounting schemes and annual accounting scheme which might help smaller businesses providing they meet the right criteria, so some tax advice at the time you register, would likely be beneficial.

 

More information can be found on HMRC website at

 

If you would like help and advice on VAT, then please