VAT (Value Added Tax) is charged on most business transactions. A business will normally pay this on purchases and charge on the sales. The difference between sales and purchases taxes is payable/reclaimable from HMRC.
Read through this page from the UK Government website for further information on VAT.
This tax is charged at different rates for various transactions, current rates are:
- Standard rate – 20%
- Reduced rate – 5%
- Zero rate – 0%
If your business turnover is above a certain amount (£82,000 for 2015/16, £83,000 for 2016/17), then you have to register for VAT and submit monthly or quarterly returns. The Finance Equation team can help you determine if your business needs to be registered or not, we can prepare returns and submit them for you as well as give you advice.
Depending on how you trade, value added tax is possibly the most complex tax there is. There are different rules if you trade internationally, there may be reverse charge rules that apply to your business and there are some special rules if you trade in land or property. Often advance planning is essential to make sure you don’t pay more than you have to.
How can we help you?
At the Finance Equation we are passionate about helping our clients keep more of their money. If you are worried about your overall tax position our VAT accountants can definitely help you navigate the maze.
Contact Finance Equation by using the link below.