Value Added Tax is more commonly known as VAT and is a tax on supplies. The exact amount of tax to be added is calculated using ‘the rate of VAT’ which is a percentage of the ‘price before tax’, that is, the price that would have been charged if there was no tax on it.
When your taxable turnover reaches a certain threshold, you must register for VAT. This applies whether you are in a business partnership, a Limited Company or an individual in business. Failing to register for VAT may leave you subject to penalties.
This VAT information section of our site is to provide guides and tips regarding registration, submitting returns, rates of VAT and more.
Schemes to assist small businesses include:
Flat Rate Scheme – this scheme helps by reducing the amount of detailed VAT records that are required.
Cash Accounting – this scheme helps small businesses with cashflow. It requires VAT on sales when your customer pays you to be accounted for. VAT can only be claimed on purchases and expenses once have paid for.
Annual Accounting – with this scheme only one VAT return is due to be submitted to HMRC each year.
VAT on Business Entertaining
VAT on the Purchase of a Car
VAT on Conversions
HMRC is Tackling Online VAT Fraud