Registered businesses charge Value Added Tax (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.

Rates

Standard: 20%

Reduced: 5%

Limits

Annual Registration Limit (1.4.23 to 31.3.24): £85,000

Annual Deregistration Limit (1.4.23 to 31.3.24): £83,000

Require more information?

If you would like more information or would like to speak to us direct then call us on 01525 601321. Or if you would prefer, ask us a question online.

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Upton Wilson Ltd are registered in England and Wales company number 6455885. Registered office: Upton Wilson Ltd, 3 West Street, Leighton Buzzard, Bedfordshire LU7 1DA
Regulated for a range of investment business activities in the United Kingdom by the Association of Chartered Certified Accountants.