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VAT

February, 2008

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What is VAT?

11/2/2008 11:24:01 AM

Value Added Tax (VAT) is a tax charged on most business transactions made in the UK or the Isle of Man.

All goods and services that are VAT rated are called ‘taxable supplies’. You must charge VAT on your taxable supplies from the date you first need to be registered. The value of these supplies is called your ‘taxable turnover’

Some examples of taxable supplies:If you are VAT registered, you will charge VAT on many goods and services you supply to customers in the UK and Isle of Man.VAT does not apply to certain services because the law says these are ‘exempt’ from VAT. These include loans of money, some property transactions, insurance and certain types of education and training. Supplies that are exempt from VAT do not form part of your taxable turnover.

It is also charged on goods, and some services, imported from places outside the European Union and on goods and some services coming into the UK from the other EU countries.

1.Selling new and used goods, including hire purchase.
2. Renting and hiring out goods.
3. Using business stock for private purposes.
4. Providing a service, for example hairdressing or decorating and
5. Charging admission to enter into buildings.

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