Value Added Tax is a tax on supplies of goods and services. The majority of these are taxed at the standard VAT rate in the UK but others, such as books and newspapers, food sold in shops and some services connected with housing, health and education, are zero rated. The rate for domestic fuel and power is currently 5%.
A supply made by one business to another in a different member state of the European Community is usually liable for VAT in the customer’s country. Supplies made from the EC to customers outside are, however, free from VAT.
There are times when careful planning can achieve relief from VAT whilst ensuring that the various rules and regulations are complied with. If your business is just starting, it is unlikely you will need to register with HMRC straight away. When the value of taxable supplies reaches a set amount in a consecutive rolling period of 12 months, application becomes compulsory. It is essential that registration deadlines are met in order to avoid penalties.
There are still ways of easing the administrative burden of VAT even if it is not possible to escape registration and, in some cases, it is beneficial to register even though there is no legal requirement to do so. Sayers Butterworth LLP has long experience in knowing and understanding how VAT works, its pitfalls and the benefits associated with early planning.
For more detail on how we would work to help you, contact Martin Dunne and Greg Nichols.