• Registered businesses charge 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.

VAT - rates and limits 2017/18
 
Standard rate
 20%
Reduced rate
 5%
Annual Registration Limit
- from 1.4.17 - 31.3.18 (1.4.16 - 31.3.17 £83,000)
 
£85,000
Annual Deregistration Limit
- from 1.4.17 - 31.3.18 (1.4.16 - 31.3.17 £81,000)
 
£83,000

Disclaimer

This publication is published for the information of clients. It provides only an overview of the regulations in force at the date of publication and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this publication can be accepted by the authors or the firm.