Value Added Tax
What is Value Added Tax
You’ve probably heard about VAT before – it stands for Value Added Tax and is added onto prices in the UK.
- Value Added Tax or VAT is a tax charged on most goods, services and imports sold by VAT-registered businesses in the UK.
- When a VAT-registered business buys goods and services it can usually reclaim the VAT paid if certain conditions are met (see below
Who has to register for VAT?
- A Business making taxable supplies in the UK, i.e. not only exempt or out-of-scope supplies, which:
- Expects its taxable turnover in a rolling 12-month period, or the next 30 days, to exceed the registration threshold of £85,000 (the registration threshold is frozen at this level until 31 March 2026).
- Is taking over a business as a Transfer Of a Going Concern, see Taking over a business (VAT traps).
Has taken over the business premises of a VAT-registered business and is carrying on a similar trade, see VAT: taking over an existing business. - If you are going to make any taxable supplies you can choose to register for VAT, regardless of your expected or actual level of turnover. This is known as voluntary registration.
- You cannot register if you do not or will not make taxable supplies, for example, if all of your supplies are exempt.
Businesses based outside of the UK that supply goods or services to the UK must register for UK VAT regardless of the value of their taxable supplies. These are known as Non-Established Taxable Persons (NETPs)
