Value added tax

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

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Higson & Co (Nottingham) Limited, White House, Wollaton Street, Nottingham, Nottinghamshire NG1 5GF
S C R Skill FCA, Mrs G J Strickland FCA, D R Wallwork BA FCA, Miss E C Davey FCCA Registered to carry out audit work in the UK and regulated for a range of investment business activities by the Institute of Chartered Accountants in England and Wales. Details about our audit registration can be viewed at www.auditregister.org.uk under reference C011003720. A member of the ICAEW Practice Assurance Scheme

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