V is for VAT
VAT is short for Value Added Tax and is charged on most sales of goods and services in the UK.
There are different types of sales.
Taxable sales or VATable sales are sales in which VAT would be charged.
Some sales have special rules which mean they are exempt from VAT or out of the scope and these are not taxable sales.
The VAT threshold is currently £85,000 and calculated on a rolling basis. This means that you need to keep an eye on the taxable turnover in a rolling 12 month period not just your financial year but the last 12 months at any point.
The VAT threshold is currently £85,000 and calculated on a rolling basis. This means that you need to keep an eye on the taxable turnover in a rolling 12 month period not just your financial year but the last 12 months at any point.
If your sales are reaching this threshold and you are unsure what this means for you in your industry, then please just get in touch to discuss.
Quick myth busters:
- You do not have to be a limited company to be VAT registered.
- The VAT rules applies to all business structures, sole traders, partnerships, limited companies, or any other structures.
- You shouldn’t charge VAT unless you are registered.
VAT can be intimidating whether you are new to it, or you have been VAT registered for a while so please get in touch if you have any questions.
Flo