VAT

For a wealth of advice and information on aspects of VAT, including essential tips for VAT planning, and how to survive the VAT inspector's visit, visit our VAT guides.

The standard rate of VAT is 20% and remains unchanged.

An introduction to VAT

Detailed guidance on the operation of VAT, VAT schemes and essential VAT information.

Value added tax

VAT rates, registration and deregistration limits.

Bad debt relief

Under the normal rules of VAT, a supplier has to account for output tax even if the supply has not been paid for. VAT cannot be reclaimed by issuing a credit note for the unpaid amount.

Issuing VAT invoices

Where a VAT registered person makes supplies of goods or services to another VAT registered person, subject to the standard or reduced rate.

Recovering VAT on staff expenses

Although the VAT rules normally prevent you reclaiming VAT on supplies that are not made direct to you, there are certain circumstances when the rules are relaxed.

When to add VAT

This subject has been causing confusion ever since VAT was introduced in the UK. There are a number of issues to consider.

Deregistering from VAT

Deregistration from VAT is usually a fairly straightforward process. However, there are some important aspects to bear in mind which, if misunderstood, could prove costly.

Cash accounting scheme

Cash accounting enables you to account for VAT on the basis of payments received and made instead of on tax invoices issued and received.

Flat rate scheme

This scheme is designed to reduce the cost of complying with VAT obligations by simplifying the way small businesses calculate their VAT.

Annual accounting scheme

Under annual accounting, you make agreed payments on account and need complete only one VAT return per year. The purpose of the scheme is to aid cashflow and budgeting.

VAT dos and don'ts

If you need to check you are being given a valid VAT number you can call HMRC's national advice service on 0845 010 9000 from 8am to 6pm Monday to Friday.

VAT inspections

One of life's certainties is that if you are a VAT registered business, sooner or later you will have a check by an HMRC officer, either at your business premises or remotely.

How to survive the enforcement powers

The complicated penalty system for VAT errors has been simplified, but it is not all good news.

VAT grouping occurs where two or more corporate bodies, usually companies or limited liability partnerships are treated as a single taxable 'person' for VAT purposes. A VAT group is treated in the same way as a single company registered for VAT on its own.

VAT Mini One Stop Shop (MOSS)

MOSS provisions relate to the VAT place of supply of services rules. These are the supplies of e-services, broadcasting and telecommunications (BTE).

VAT