Value-added tax or in abbreviated form VAT is a consumption tax charged on goods and services. As these two components progress through the supply chain, the value of the goods and services increases on each step. This Vat is paid by the end customer in the process.
Some countries of the world have converted VAT into GST. But, in the United Kingdom the system of VAT is still prevalent.
- When should a business charge VAT?
Any VAT registered business is bound to charge VAT on their taxable sales. Inside the country of the United Kingdom, the application of VAT is quite convenient for any business owner. But if you are exporting your goods and services out of the country, it may seem a little difficult for you. Export VAT depends on the location of your customer, the amount of goods being exported, and the VAT registration of the customer.
- How to file for VAT payment?
Before filing for VAT - arrange all your bills and expenses. You can use various apps to send pictures of bills and expenses to the concerned authority. You can also email them from your registered email address. There are several apps such as quickbooks, xero, etc to facilitate the process of the VAT return.
- Different cases of VAT charging
On most of the purchases in the United Kingdom, the VAT charge is 20%. But there is always some exception. For shopping energy fuel for domestic use, car seat of children, and energy-saving things the VAT charge is only 5%. There are also some zero-rated goods such as clothing and books for children, newspapers, building houses, sports products and so on.
To help you with VAT, several financial services have emerged in the market. They offer you VAT online services, ecommerce accounting, bookkeeping services, other tax services, etc. Go through the aforementioned facts about VAT to do it yourself or you can connect with these agencies any time.
