VAT Bookkeeper London

VAT Bookkeeper London What is VAT ?

VAT is levied on the sale of goods and services in the UK . It is a type of consumption tax because it is charged on items that people buy and is also an indirect tax because it is collected

by businesses on behalf of the Government.

The standard rate of tax in the UK is currently 20% which is the rate charged on most purchases. However, there are another 2 Vat rates. There is a reduced rate of 5%

charged on certain items such as sanitary products, children’s car seats etc. There is also a zero rate and as the name suggests charged at 0 %. This applies to

most food, books, children’s clothes etc. HMRC have published a whole booklet with all the different categories.

Biggest change in VAT in decades !

Making Tax Digital has just been introduced and applies from 1^st April 2019. This means now all businesses have to by law submit their VAT returns digitally via MTD ready

software. Up to now, submitting VAT returns meant logging onto HMRC website and completing VAT online by inserting the numbers in the relevant boxes.

MTD means submitting the VAT return via your software directly. HMRC have already contacted all businesses to register on time and be ready for the new change.

Who pays VAT ?

Businesses with a turnover of more than £85,000 must register to pay and charge VAT on the goods and services they buy an sell. Other businesses can choose to register for VAT

voluntarily.  Businesses will charge their customers VAT, so collecting on behalf of the Government. When it is time to file the VAT return, usually quarterly,  will calculate

the Output VAT on the sales made less the Input VAT on purchases made and pay the difference over to HMRC.

There are certain deadlines to keep to otherwise clients will receive penalties for late returns.