Below you will find information in Q&A format about value added tax.

What are the current VAT rates in the UK?

Rates vary according to what you’re supplying, and there are four main categories to think about: standard rate, reduce rate, zero-rated and exempt supplies. Rates are subject to change and you must apply changes from the date they change. Read more about what exactly is VAT

How to check the validity of the company VAT number?

To verify the validity of the VAT number you can use the official services. For UK companies there is an UK VAT number checker. If you need to check the VAT number of a European company, try VIES VAT number validation.

What is the flat rate scheme?

The Flat Rate Scheme is open to businesses with a turnover of less than £ 150 000, and it’s designed to simplify the VAT process – particularly for freelancers, contractors and small businesses. You have to make sure you apply to HMRC to sign up for it. Read more about flat rate VAT scheme.

Do I really need to register for VAT?

Well, that depends on your particular circumstances. If your turnover in a 12-month period reaches the current £85,000 threshold, then registration is compulsory – and if you don’t do it, you’ll receive a fine as a penalty. If you don’t hit this figure, then registration isn’t obligatory. Read more about registration for VAT.

What are the differences between zero rate and exempt supplies?

Although both of these categories result in no VAT being applied to the supply, the consequence is very different between them. Where a supply could be either zero-rated or exempt, zero-rating takes priority.

How does VAT affect charities?

There is no general exemption for charities from the VAT system. Only VAT registered charities can reclaim the VAT they are charged, subject to restrictions on the amount they can recover.

Do I need to pay VAT on EC invoices?

When purchasing Goods from EU (from the 1 Jan 2021) the process falls in line with the current process for purchasing goods from overseas. The invoice from the supplier won't contain VAT and should be processed using Tax Code PZ.

How do I apply for Import Duty Relief Certificate?

All goods imported into the U.K. from countries outside the UK (from 1 Jan 2021) are subject to import duty and VAT at rates applicable. Customs Duty will not be applied on goods with a value less than £135 but duty is waived if the amount of duty calculated is less than £9.

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