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.

Since 1 April 2012, 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;">£81,000. </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;">£79,000</span></strong>. If your VAT taxable turnover for the year is less than or equal to £79,000, or if you expect it to fall to £79,000 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.

<strong><span style="text-decoration: underline;">Registration threshold for distance selling </span></strong>

Distance selling is when you sell goods from one European Union (EU) country to customers in another EU country who aren't registered - and don't have to be registered - for VAT.
<ol start="1">
	<li><strong>Sales into the UK</strong></li>
</ol>
If you're a supplier from another EU country selling to customers who aren't registered for VAT in theUK, then until the value of your distance sales goes over theUKdistance selling registration threshold - currently £70,000 - you pay VAT in theMemberStatein which you're registered.

If the value of your distance sales toUKcustomers in a calendar year from 1 January is more than £70,000, then you must register and account for VAT in theUKas soon as they go over the threshold. You may apply to be registered for your distance sales in theUKbefore they reach the threshold. If your distance sales to theUKinclude excise goods, such as tobacco or alcohol you must register for VAT whatever their value.

You can apply to cancel your registration if the annual value of your distance sales to theUKfalls to £70,000 or less and doesn't include excise goods or you expect that your distance sales will be less than £70,000 in the current year.
<ol start="2">
	<li><strong>Sales or movements to other EU countries</strong></li>
</ol>
Each EU country has a distance selling threshold. If you are registered for VAT in theUKand supply goods from theUKto customers in another EU country who aren't VAT registered, you must charge VAT atUKrates until your sales exceed the threshold for that country. Once they exceed the threshold, you must register for VAT in that country and charge their rate of VAT on the sales. You'll have to record your sales for every EU country and check regularly to see if they go over that country's threshold.

You might transfer your own goods to another part of your organisation, or put them in storage, in another EU country. This is treated as if you'd made an acquisition there and you'll have to account for VAT in that country.

<strong><span style="text-decoration: underline;">VAT on acquisitions from EU countries</span></strong>

You may have to register for VAT if you acquire goods from other EU countries and you aren't already registered for VAT.

<strong>Registration threshold for acquisitions from other EU countries</strong>

You may have to register and account for VAT if you acquire goods (not services) from other EU countries and their total value is over the VAT registration threshold for acquisitions - currently £73,000.

You must register if either of the following applies:
<ul>
	<li>at the end of any month, the total value of your acquisitions from all other EU countries in the year, or part of the year, from 1 January exceeded the threshold</li>
	<li>you estimate that the value of your acquisitions in the next 30 days alone will be over the threshold</li>
</ul>
If you're not already registered for VAT you must register as soon as the total value of your acquisitions exceeds, or is expected to exceed, the threshold. You may also register voluntarily where the value of those acquisitions is below the threshold.

You can apply to cancel your registration if the annual value of your acquisitions falls to £73,000 or less or you expect your acquisitions to fall below £73,000 in the next year, unless you would be required to be registered in respect of your UK VAT taxable sales.

<strong>Disposing of assets on which Eighth or Thirteenth Directive refunds have been claimed </strong>

The Eighth Directive allows someone registered for VAT in one EU country to reclaim VAT they've paid in another EU country. The Thirteenth Directive allows businesses established outside the EU to reclaim VAT paid within the EU.

You'll have to register for VAT if you claimed, or intend to claim, a repayment under either of these Directives on goods, and both the following apply:
<ul>
	<li>the goods are business assets - or are incorporated into business assets</li>
	<li>you make a VAT taxable supply of those goods, or intend to make one in the next 30 days</li>
</ul>
<strong><span style="text-decoration: underline;">Threshold for simplified EC Sales Lists</span></strong>

If you make supplies of goods to VAT-registered traders in other EU countries, including transfers of your own goods, or you arrange for goods to be delivered direct from your supplier to your customer who is in another EU country, you must complete an EC Sales List (ESL).

You may apply to HMRC for permission to submit a simplified annual ESL provided all the following three conditions are met:
<ul>
	<li>your annual VAT taxable turnover does not exceed £72,500</li>
	<li>the annual value of your supplies to other EU countries is not more than £11,000</li>
	<li>the supplies do not include New Means of Transport (boats, aircraft and motorized land vehicles)</li>
</ul>
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