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 until 1 April 2022.

Rates

Standard: 20%

Reduced: 5%*

* 12.5% for hospitality and tourism from 1 October 2021 to 31 March 2022.

Limits

Annual Registration Limit (1.4.21 to 31.3.22): £85,000

Annual Deregistration Limit (1.4.21 to 31.3.22): £83,000

Home | Contact us | Site map | Accessibility | Disclaimer | Help | powered by totalSOLUTION

© 2021 Schofields Chartered Accountants. All rights reserved. We use cookies on this website, you can find more information about cookies here.

Please note that calls to our office may be monitored or recorded
Full company name: Schofields Partnership LLP. Registration number: OC344961 Place of registration: England & Wales.
Details about our audit registration can be viewed at www.auditregister.org.uk, under reference number C002209287.

Registered office address: Schofields Chartered Accountants, 5th Floor Waverley House, 115-119 Holdenhurst Road, Bournemouth, Dorset BH8 8DY