An Introduction to VAT
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Home > Tax Insights > VAT > An introduction to VAT
An introduction to VAT
What is VAT?
VAT is a tax chargeable on taxable supplies made in the UK by taxable persons. Credit is given for tax paid to other businesses and the net balance is payable or reclaimable - normally on a quarterly basis.
Taxable persons
A taxable person is any person carrying on a business which is, or is required to be registered for VAT and includes the following: If you suspect VAT fraud | You can report a suspected VAT fraud on Customs Confidential hotline on 0800 595 0000 begin_of_the_skype_highlighting 0800 595 0000 end_of_the_skype_highlighting. The line is open 24/7. You will not be required to provide your personal details. | * An individual * A partnership * An unincorporated association, e.g. trust or charity * A limited company * A limited liability partnership
Supplies
VAT law covers all types of supply of goods or services (outputs), whether of a revenue or capital nature. Supplies include sale, hire, or loan of goods. Outputs normally fall into four categories: 1. Positive rated - taxable at applicable VAT rates. 2. Zero rated - including socially or economically important items, e.g. exports, most food, books, newspapers, public transport, drugs on prescription, children's clothing 3. Exempt supplies - including necessities such as insurance, postage, finance, education, and health 4. Some receipts are outside the scope of VAT, e.g. dividends, shares of profit compensation for losses, non UK supplies
Should I be registered for VAT?
You should notify HM Revenue & Customs when: * Taxable turnover for the past twelve months exceeds £70,000 * There are reasonable grounds for believing that your turnover for
Home > Tax Insights > VAT > An introduction to VAT
An introduction to VAT
What is VAT?
VAT is a tax chargeable on taxable supplies made in the UK by taxable persons. Credit is given for tax paid to other businesses and the net balance is payable or reclaimable - normally on a quarterly basis.
Taxable persons
A taxable person is any person carrying on a business which is, or is required to be registered for VAT and includes the following: If you suspect VAT fraud | You can report a suspected VAT fraud on Customs Confidential hotline on 0800 595 0000 begin_of_the_skype_highlighting 0800 595 0000 end_of_the_skype_highlighting. The line is open 24/7. You will not be required to provide your personal details. | * An individual * A partnership * An unincorporated association, e.g. trust or charity * A limited company * A limited liability partnership
Supplies
VAT law covers all types of supply of goods or services (outputs), whether of a revenue or capital nature. Supplies include sale, hire, or loan of goods. Outputs normally fall into four categories: 1. Positive rated - taxable at applicable VAT rates. 2. Zero rated - including socially or economically important items, e.g. exports, most food, books, newspapers, public transport, drugs on prescription, children's clothing 3. Exempt supplies - including necessities such as insurance, postage, finance, education, and health 4. Some receipts are outside the scope of VAT, e.g. dividends, shares of profit compensation for losses, non UK supplies
Should I be registered for VAT?
You should notify HM Revenue & Customs when: * Taxable turnover for the past twelve months exceeds £70,000 * There are reasonable grounds for believing that your turnover for