Among the various taxes applicable in the United Kingdom is the Value Added Tax or VAT. The earlier VAT rate for the United Kingdom was 17.5%. The current standard rate of the Value Added Tax in the United Kingdom is 20%. Value Added Tax is also applicable on goods and services which are imported from countries outside the European Union and imported into the UK through other countries within the European Union.
When can you charge VAT?
Business in the United Kingdom which want to collect Value Added Tax need to follow certain guidelines. As a part of this guideline, the initial thing that you need to do to start charging Value Added Tax is to register your business for Value Added Tax.
What are some of the items or services on which Value Added Tax can be charged?
According to the VAT guidelines, there are only certain items and services on which Value Added Tax is applicable. The various items and services on which Value Added Tax can be charged are:
- On the sale of goods and services
- On commission
- On the sale of items to staff/team
- On hiring goods to others
- On selling business assets
- On business goods used for personal reasons
What are the goods and services which are exempted from Value Added Tax?
According to the guidelines for Value Added Tax, there are certain goods and services which are exempted from Value Added Tax. It means that you can’t charge Value Added Tax on those goods and services. Some of the items and services which are exempted from Value Added Tax are as follows:
- Health services provided by doctors
- Postage stamps or services
VAT calculator UK
With the help of the VAT calculator UK, you can calculate the amount of Value Added Tax on goods and services in the United Kingdom. This is extremely useful for people and businesses in the United Kingdom. It helps you figure out the Value Added Tax charged on a net amount or the Value Added Tax contained within a total amount. This calculator lets you change the Value Added Tax rate. You can add or subtract Value Added Tax from the gross amount easily.
One thing that you need to be careful about when using this online calculator is to check the dates on the invoice or receipt of the good or service. If the date mentioned on the receipt is prior to January 4, 2011, the standard rate applicable will be 17.5%. If the date is January 4 or later, the standard rate of 20% will be applicable.
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