Should I be registered for VAT?Posted 2013 by admin
VAT is a tax that is charged on most goods and services that VAT registered businesses provide in the UK to either another business or to a non-business customer. It is also charged on goods and some services that are imported from countries outside the European Union (EU), and brought into the UK from other EU countries.
VAT registered businesses add VAT to the sale price of most goods and services they provide and, in many cases, can reclaim the VAT they pay when they buy goods and services for their business.
There are different rates of VAT depending on the goods or services that are being provided. Currently there are 3 rates;
- Standard rate at 20%
- Reduced rate at 5%
- Zero rate at 0%
In most cases the standard rate of 20% is charged on goods and services.
There are also 2 further types of supply that are not covered by VAT. These items are either;
- Outside the scope of VAT
If you are a business and the goods or services you provide count as “taxable supplies” which are broadly the supplies at standard, reduced or zero rate then you will have to register for VAT if either;
Your turnover for the previous 12 months has gone over the VAT registration threshold (currently £79,000)
- You think your turnover will go over this limit within the next 30 days
Even if your turnover is below the VAT threshold it may be advisable to register for VAT, for example to reclaim the VAT on your expenses or to take advantage of one of the special VAT schemes.