Value added tax

Registered businesses charge Value Added Tax (VAT) on their sales. This is known as output VAT and the sales are referred to as outputs.

Similarly VAT is charged on most goods and services purchased by the business. This is known as input VAT.

There are three rates: standard which applies to most goods and services, reduced rate for some goods and services such as home energy and zero rate goods and services, for example, most food and children's clothes.

Some supplies are exempt from VAT for example postage stamps, financial and insurance transactions.

A business is required to register for VAT if the value of taxable supplies exceeds the annual registration limit.

The government has frozen the VAT registration and deregistration limits until 1 April 2022.

Rates

Standard: 20%

Reduced: 5%*

* 12.5% for hospitality and tourism from 1 October 2021 to 31 March 2022.

Limits

Annual Registration Limit (1.4.21 to 31.3.22): £85,000

Annual Deregistration Limit (1.4.21 to 31.3.22): £83,000


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Sproull & Co. is the trading name of Sproull & Co. Limited, a limited company registered in England and Wales with registration number 7996772, whose registered office is at Sproull & Co Ltd, First Floor, Jebsen House, 53-61 High Street, Ruislip, Middlesex HA4 7BD
Registered to carry on audit work in the UK and regulated for a range of investment business activities by the Institute of Chartered Accountants in England & Wales. VAT Registration number 222922681