vatVAT is a tax that’s charged on most business transactions in the UK. Businesses add VAT to the price they charge when they provide goods and services to:

If you’re a VAT-registered business, in most cases you:

 

  • charge VAT on the goods and services you provide
  • reclaim the VAT you pay when you buy goods and services for your business
  • If you’re not VAT-registered then you can’t reclaim the VAT you pay when you purchase goods and services.

When you will need to register VAT?

  • your turnover for the previous 12 months has gone over a specific limit – called the ‘VAT threshold’ (currently £81,000)
  • you think your turnover will soon go over this limit
Rate % of VAT What the rate applies to
Standard 20% Most goods and services
Reduced rate 5% Some goods and services, eg children’s car seats and home energy
Zero rate 0% Zero-rated goods and services, eg most food and children’s clothes
Circumstance Threshold
VAT registration More than £81,000
Registration for distance selling into the UK More than £70,000
Registration for bringing goods into the UK from the EU More than £81,000
Completing simplified EC Sales List £72,500 or less and supplies to EU countries of £11,000 or less
BY Bank:
Sort code Account number Account name
08 32 00 11963155 HMRC VAT
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