VAT is a tax that's charged on most business transactions in theUK.

A VAT-Registered Business must add VAT to the price they charge when they provide goods and services. This is called the OUTPUT TAX.

In most cases, A VAT-Registered business can reclaim the VAT they pay on the purchases of goods and services for their business. This is called the INPUT TAX.

At the end of each VAT period - usually every three months - you need to fill in a VAT Return.

ALL VAT-Registered businesses must submit VAT Returns online and pay any VAT due electronically.

<strong><span style="text-decoration: underline;">VAT rates</span></strong>

There are different rates of VAT that apply to different types of goods and services. And there are some goods and services that are exempt from VAT.

There are three VAT rates:
<ul>
	<li>standard rate - 20 per cent</li>
	<li>reduced rate - 5 per cent</li>
	<li>zero rate - 0 per cent</li>
</ul>
The are the current rates.

<span style="text-decoration: underline;">If you're registered for VAT, you have to charge VAT at the standard rate on all goods and services you supply, <strong>unless </strong>they fall into one of these categories</span>:
<ul>
	<li>zero-rated</li>
	<li>reduced-rated</li>
	<li>exempt from VAT</li>
	<li>outside the scope of VAT</li>
</ul>
<strong><span style="text-decoration: underline;">VAT registration threshold</span></strong>

If you're in business, you must register for VAT if your VAT taxable turnover for the previous 12 months is more than <strong><span style="text-decoration: underline;">£82,000. </span></strong>This figure is known as the VAT registration threshold. The threshold changes - usually once a year announced in the Budget - so you should regularly check your turnover against the current threshold.

You must also register for VAT if either of the following applies:
<ul>
	<li>you think your VAT taxable turnover may go over the threshold in the next 30 days alone</li>
	<li>you take over a VAT-registered business as a going concern</li>
</ul>
<strong><span style="text-decoration: underline;">Deregistration threshold</span></strong>

The deregistration threshold is <strong><span style="text-decoration: underline;">£80,000</span></strong>. If your VAT taxable turnover for the year is less than or equal to 80,000, or if you expect it to fall to £80,000 or less in the next 12 months, you can either:
<ul>
	<li>stay registered for VAT</li>
	<li>ask for your VAT registration to be cancelled</li>
</ul>
If you decide to stay registered, you don't have to do anything.

If you want to cancel your VAT registration you must write to HM Revenue &amp; Customs (HMRC) to explain why your turnover has fallen. For example, you might have reduced your opening hours or lost contracts. You'll also have to give an estimate of your turnover for the next year.

Remember that your VAT taxable turnover includes only the goods and services you sell that you have to charge VAT on, even those that are zero-rated. It does not include sales that are exempt or outside the scope of VAT.

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