VAT or Value-Added Tax is a consumption tax that is passed on through a supply chain to the end purchaser. VAT needs to be charged on certain products or services once the business reaches the VAT threshold. This also enables the company to reclaim the VAT on any products or services that they have purchased. It is important that you follow all the relevant guidelines and the best way to do this is to work with a Swindon Accountants to get you set up properly.
There are a number of things to consider when it comes to VAT and these include.
- Rate of VAT to charge – there are essentially three VAT rates, a standard rate which is charged at 20%, a reduced rate which is charged at 5% and a Zero-rated which is charged at 0% and is not the same as those exempt from VAT. To understand these rates you should speak with Chippendale and Clark Accountants in Swindon who can help you with your VAT submissions.
- VAT info on invoices – you must ensure that you separate out the VAT on your invoices and that you display your VAT registration number clearly as well.
- Reporting – you will need to submit VAT returns on a quarterly basis based on the date that your VAT registration was granted. It is important that you make a note of any VAT deadline dates and submit your return and pay the VAT owed by the deadline.