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VAT

If you run a business you’ll need to know about VAT rates and registration thresholds.

A VAT registered business charges VAT when selling goods or services and in turn they can generally reclaim the VAT they have paid on any goods and services purchased.

The graphic below, supplied by Sage, illustrates simple solutions to manage your VAT:-

There are three rates of VAT, depending on the goods or services the business provides. The current 2017-18 rates are: – standard @ 20%, reduced @5% and zero @0%. There are also some goods and services that are exempt from VAT or outside the UK VAT system altogether. See a complete list of VAT rates here:- https://www.gov.uk/guidance/rates-of-vat-on-different-goods-and-services

Find general information on VAT here https://www.gov.uk/business-tax/vat

In addition to sales, a VAT registered business must account for and pay VAT on:

  • items sold to staff, such as canteen meals or via vending machines
  • sales of business assets
  • hiring or loaning of goods to someone else
  • commission received from selling something on behalf of someone else
  • certain business gifts
  • goods that you or your staff take out of the business for personal use, whether on a temporary or permanent basis
  • services supplied to the business but then used privately
  • barter or part-exchange
  • samples

A business should consider registration if VAT taxable turnover (see explanation below) for the last 12 months is more than £85,000 (April 2017 threshold for VAT registration). The de-registration threshold is £83,000 (April 2017). Check Current VAT Registration Threshold

A VAT taxable turnover is the total of sales and certain other supplies that are subject to VAT, including supplies that are zero-rated. If goods or services sales are exempt from VAT they’re not subject to VAT and so they’re not part of VAT taxable turnover.

There are some VAT schemes that businesses may be able to use to reduce paperwork and save time. A business can only use some of these schemes if VAT taxable turnover is below a certain threshold. See VAT Scheme basics

HMRC The VAT Guide – This guide explains the basics of how VAT works. It also tells you where you can find more information and advice.

HMRC offers webinars at various times – see the list and how to view: https://www.gov.uk/guidance/help-and-support-for-vat

VAT Mini One Stop Shop (VAT MOSS)

If your business supplies digital services to consumers in the EU, you can register with HM Revenue and Customs (HMRC) the VAT Mini One Stop Shop (VAT MOSS) scheme. There are 2 UK VATMOSS schemes that operate in an almost identical way:

  • Union VAT MOSS scheme for businesses established in the EU including the UK
  • Non-Union VAT MOSS scheme for businesses based outside the EU (for example, the USA, Canada, China)

By using the VAT MOSS scheme, you won’t have to register for VAT in every EUmember state where you make digital service supplies to consumers.

Once you register for a UK VAT MOSS scheme HMRC will set you up automatically for the online VAT MOSS Returns service.

Click on this link for more detail :- https://www.gov.uk/register-and-use-the-vat-mini-one-stop-shop

Contact details

VAT Help

Click this link to see how to make a general enquiry regarding VAT:- https://www.gov.uk/government/organisations/hm-revenue-customs/contact/vat-enquiries

Call HMRC for help with general VAT enquiries. Have your VAT registration number and postcode with you when you call.

You can’t pay or agree time to pay over the phone.

Telephone:
0300 200 3700

Textphone:
0300 200 3719

Outside UK:
+44 2920 501 261

Opening times:

8am to 6pm, Monday to Friday

Closed weekends and bank holidays

Best time to call:

Phone lines are less busy between 8am and 11am, Monday to Friday

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