Value added tax

Registered businesses charge Value Added Tax (VAT) on their sales. This is known as output VAT and the sales are referred to as outputs.

Similarly VAT is charged on most goods and services purchased by the business. This is known as input VAT.

There are three rates: standard which applies to most goods and services, reduced rate for some goods and services such as home energy and zero rate goods and services, for example, most food and children's clothes.

Some supplies are exempt from VAT for example postage stamps, financial and insurance transactions.

A business is required to register for VAT if the value of taxable supplies exceeds the annual registration limit.

The government has frozen the VAT registration and deregistration limits for two years from 1 April 2018.

Rates

Standard: 20% (unchanged from 2017/18)

Reduced: 5% (unchanged from 2017/18)

Limits

Annual Registration Limit (1.4.18 to 31.3.19): £85,000 (unchanged from 2017/18)

Annual Deregistration Limit (1.4.18 to 31.3.19): £83,000 (unchanged from 2017/18)

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William Hinton, Ross House, The Square, Stow-on-the-Wold, Gloucestershire GL54 1AF


© 2018 William Hinton.

William Hinton Limited is registered in England & Wales. Company number: 3560599. Regsitered office: Ross House, The Square, Stow-on-the-Wold, Gloucestershire GL54 1AF
Details about our audit registration can be viewed at www.auditregister.org.uk under reference number C001018516
Registered to carry on audit work in the UK and Ireland and regulated for a range of investment business activities by the Institute of Chartered Accountants in England and Wales
William Hinton Limited is covered for Professional Indemnity by Syndicate DTW1991 at Lloyds, policy number TPISCA01A2722717