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Do these rates apply to all goods and services? How can I find the VAT rate for a particular supply? When must I register and start charging VAT? What happens after I've registered?
What is VAT?VAT is a tax on consumer expenditure. It is collected on business transactions, imports and acquisitions. Most business transactions involve supplies of goods or services. VAT is payable if they are:
What are the VAT rates?There are three rates of VAT:
 Do these rates apply to all goods and services?No. Some supplies are exempt from VAT, which means that no VAT is payable. Also supplies are outside the scope of VAT if they are: • made outside the UK and Isle of Man or • not made in the course of business How can I find the VAT rate for a particular supply?You can find details of which goods and services may be zero/reduced rated or exempt in Notice 700 The VAT guide and Notice 701/39. It also tells you where you can find additional information if you are unsure about the liability of a particular supply. When must I register and start charging VAT?The supply of any goods and services, which are subject to VAT at any rate are called taxable supplies whether you are VAT registered or not. If the value of your taxable supplies is over a specific limit, you need to register for VAT, unless your supplies are wholly or mainly zero rated in which case you may apply for exemption from registration. The limits are shown in the supplement to Notice 700/1 Should I be registered for VAT? You may be charged a penalty if you register late. The easiest way to register for VAT is by using our online Registration service. Notice 700/1 also explains how to apply for: • registration if the value of your taxable supplies is above the limit • exemption from registration if your taxable supplies are wholly or mainly zero-rated • exception from registration if you can show your future turnover will be below the ‘deregistration' limit • voluntary registration if the value of your taxable supplies is below the limit for compulsory registration; • registration when you make distance sales to the UK or relevant acquisitions into the UK; and • voluntary registration when you make supplies outside the UK that would be taxable if made in the UK. What happens after I've registered?You need to charge VAT on all your taxable supplies from your date of registration and keep:
At preset intervals you need to fill in a VAT return with details of your sales and purchases. You can do this online or using a paper return. If the VAT on your sales is more than the VAT on your purchases you pay us the difference. On the other hand, if the VAT on your purchases is more than the VAT on your sales you can claim the difference from us. The flat rate scheme for small businesses simplifies VAT accounting procedures to save you time and money. You can find further information about the records you must keep in Notice 700/21 Keeping records and accounts and the flat rate scheme in Notice 733. Further help and informationThe following link will direct you to a document on the HM Customs & Excise web site (www.hmce.gov.uk) and will give you further detailed information on registering for VAT. Click here to open the HMCE VAT document (will open in a new window). 1. VAT registration: basic information 1.1 What is this notice about? 1.2 What is VAT? 1.3 Are there different rates of VAT? 1.4 What are taxable supplies? 1.5 What are zero-rated supplies? 1.6 What are exempt supplies? 1.7 What if I opt to tax my land and buildings? 1.8 What if I only supply goods or services abroad? 1.9 What if I take over a business from someone else? 1.10 What if I have been registered for VAT before? 1.11 Do I have to register if I live or work abroad? 2. Deciding if you need to register 2.1 When must I register for VAT? 2.2 Do I have to register if I have reached the limits but I expect the value of my taxable supplies to reduce? 2.3 Can I still be registered if I am not liable to be registered? 2.4 Applying for voluntary registration if you make taxable supplies. 2.5 Applying for voluntary registration if you make distance sales 2.6 Applying for voluntary registration when you make acquisitions 2.7 Exemption from Registration 2.8 How to determine when you become liable to register 2.9 How to calculate the value of your taxable supplies. 2.10 How to calculate the value of your distance sales. 2.11 What can I register as? 3. How and when to notify us 3.1 How must I notify you? 3.2 When must I notify you? 3.3 How will my registration date be decided? 3.4 Examples of how to work out the date by which I must notify my liability to be registered 3.5 When will I get my VAT registration number? 3.6 What if I fail to notify at the correct time? 4. Accounting for VAT 4.1 When must I start keeping records and charging VAT? 4.2 VAT paid before registration. 4.3 What records must I keep? 4.4 Are there different schemes available to account for VAT? 4.5 What is a VAT return? 4.6 Can I make monthly instead of three monthly returns? 4.7 What are outputs and inputs? 4.8 Can I have tax periods to match my financial year? 5. Distance selling 5.1 What is distance selling? 5.2 How does distance selling work? 5.3 How to account for VAT once you are registered for distance sales in the UK 5.4 What if I am already registered for VAT because I make taxable supplies and/or acquisitions in the UK? 5.5 What if I make distance sales to more than one Member State? 5.6 What if a distance sale involves excise goods? 5.7 Can I register before I reach the threshold? 5.8 Can I register before I start making distance sales? 5.9 What if I do not have a UK business establishment? 6. Acquisitions 6.1 What are acquisitions? 6.2 When must I register and account for VAT on acquisitions? 6.3 Can I register if the level of my acquisitions is below the limit? 6.4 Can I register before I start making acquisitions? 6.5 In what circumstances do I not need to register due to the level of my acquisitions? 7. Relevant supplies 7.1 What are relevant supplies? 7.2 What is a predecessor? 7.3 Who has to register? 7.4 What if I am already registered for UK VAT? 8. Non-established taxable persons (NETPs): basic information 8.1 What is an NETP? 8.2 What is a 'business establishment'? 8.3 When must an NETP register for VAT in the United Kingdom (UK)? 8.4 How do I decide if I am making a supply of goods in the UK? 8.5 How do I decide if I am making a supply of services in the UK? 9. Non-established taxable persons (NETPs): voluntary registration 9.1 When can I register voluntarily as an NETP? 9.2 How do I register voluntarily for VAT? 9.3 What if I have a business establishment in the UK? 10. Non-established taxable persons (NETPs): Tax representatives and agents 10.1 Appointment and role of a tax representative 10.2 What must I do if I appoint a tax representative? 10.3 Will you make me appoint a tax representative? 10.4 May I appoint an agent instead of a tax representative? 10.5 Suggested wording for letter to authorise an agent or employee to act in VAT matters 10.6 What if I do not wish to appoint a tax representative or an agent? 11. Non-established taxable persons (NETPs): imports and movement of goods 11.1 Importation of goods from outside the EC 11.2 Examples of how to determine the place of supply of goods 11.3 Goods acquired from another EC Member State and supplied in the UK 11.4 Should I be registered if I am supplying goods to be installed or assembled? 11.5 Simplified procedure for installed or assembled goods 11.6 Can I reclaim UK VAT if I am not liable or entitled to be registered? 12. What happens after you are registered 12.1 Help and information for newly registered businesses 12.2 Visits by our officers 12.3 What should I do if my registration details change? 12.4 What should I do if I change legal entity? 13. Errors, late notification and fraud 13.1 What if I get my registration date wrong? 13.2 What if I notify you late? 13.3 What if I deliberately avoid registering for VAT? 14. Statement of Practice: Artificial separation of business activities 14.1 Introduction 14.2 Why the legislation is required 14.3 The new legislation 14.4 How the new measures will be applied 14.5 What Customs will consider to be artificial separation 14.6 The meaning of financial, economic and organisational links 14.7 How the measure will apply in particular circumstances 14.8 Advice on proposed separations 14.9 Responsibility for issuing directions 15. How to complete application Form VAT1 16. How to complete application Form VAT1A 17. How to complete application Form VAT1B 18. How to complete application Form VAT1C 19. How to complete application Form VAT1TR to appoint a tax representative in the UK INPUT VAT is paid by a business to another businesses on the supplies that it receives (in this case it is, VAT on its input supplies). Generally a business is able to recover its input VAT to the extent that the input VAT is attributable to its taxable outputs. Input VAT is claimed by setting it against the output VAT for which the business is required to account to the government, or, if there is an excess, by claiming a repayment from the government. |