Value added tax is a tax imposed by the government on goods and services within the UK. It is also sometimes added to imports. The current VAT standard rate is fixed at 20% but there are also currently two other rates of tax, reduced rate is 5% and zero rate, that stands at 0%
Tax reduced items include
- domestic fuel and power
- installing energy-saving materials
- sanitary hygiene products
- children's car seats
Zero tax items include
- food - but not meals in restaurants or hot takeaways
- books and newspapers
- children's clothes and shoes
- public transport
Some of the items that are exempt from VAT tax are:
- insurance
- providing credit
- education and training, if certain conditions are met
- fundraising events by charities, if certain conditions are met
- membership subscriptions, if certain conditions are met
- most services provided by doctors and dentists
There is a VAT Help line open office hours in the UK so people who are confused about the way they can deal with their VAT can just call them and avoid any legal problems.
VAT returns must be filled out and returned regularly, usually quarterly. if you are VAT registered you can reclaim the VAT from outgoings.
Please note that some of the content on this page is taken directly from the HM Revenue and Customs website. Referenced below.
HM Revenue and Customs. 2012. Introduction to VAT. [ONLINE] Available at:http://www.hmrc.gov.uk/vat/start/introduction.htm. [Accessed 19 September 12].
