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 value added tax.
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.
Rates
Standard: 20%
Reduced: 5%
Limits
Annual Registration Limit (1.4.23 to 31.3.24): £85,000
Annual Deregistration Limit (1.4.23 to 31.3.24): £83,000
If you have any questions about VAT, then please get in contact today and our expert Cook & Partners team will be more than happy to assist with your query.
