Clear VAT Support for Your Business
Managing Value Added Tax requires accurate records, careful calculations and timely reporting. We help businesses understand their VAT responsibilities, from registration and choosing an appropriate accounting scheme to preparing returns and reviewing the treatment of sales and purchases.
Whether you are approaching registration, managing day-to-day VAT or dealing with more complex transactions, we provide practical guidance tailored to your circumstances. Our support helps you maintain reliable records, identify potential errors and plan for payments, giving you greater confidence in your VAT position and more time to focus on running your business.
VAT rates
| Rate | % | Applies to |
|---|---|---|
| Standard | 20% | Most goods and services |
| Reduced | 5% | Domestic fuel and power, children’s car seats, some energy-saving materials |
| Zero | 0% | Most food, children’s clothes, books and newspapers |
Some supplies are exempt, such as postage stamps and most financial and insurance transactions.
Getting started
- Register for VAT if taxable turnover goes over £90,000 in a rolling 12-month period.
- Keep good records so invoices show the rates used and support input tax claims.
- Stay up to date, as rates and temporary reliefs can change.
Output VAT is what you charge on sales. Input VAT is what you pay on purchases.
Charging and reclaiming VAT
Add VAT at the correct rate to invoices, showing your VAT number and the total VAT. You can usually reclaim input VAT on business purchases, keeping valid invoices as evidence. VAT returns are usually filed quarterly, and if input VAT exceeds output VAT you can reclaim the difference.
Frequently Asked Questions
Let’s Discuss Your Requirements
Have a question about our services? Speak with our team to discuss your engagement, deadlines and the support you need.
What Is the Standard VAT Rate?
The standard VAT rate is 20%, and it applies to most goods and services sold in the UK. Unless a supply is specifically reduced-rated, zero-rated or exempt, you should assume the standard rate applies. When you charge VAT, it must be shown on your invoice along with your VAT number and the total VAT amount. We can help you check which rate applies to your products or services.
What Is Zero-Rated VAT?
Zero-rated goods and services are still taxable, but VAT is charged at 0%. Examples include most food, children’s clothes, books and newspapers. Because they are taxable, a VAT-registered business that makes zero-rated sales must still include them on its VAT return and can normally reclaim the VAT on its related purchases. This makes zero-rating different from being exempt.
Who has to Register for VAT?
A business must register for VAT when its taxable turnover goes over £90,000 in a rolling 12-month period. You can also register voluntarily below the threshold, which some businesses choose to do in order to reclaim input VAT on their purchases. Since the threshold is based on a rolling 12-month total rather than the tax year, it is worth checking your turnover regularly. We can monitor this for you and handle the registration.
What Is the Reduced Rate of VAT and What Does It Apply To?
The reduced rate is 5%. It applies to a limited range of supplies, including domestic fuel and power, children’s car seats and some energy-saving materials. If you sell these items, it is important to apply the correct rate on your invoices. We can review your sales and confirm the right treatment for your business.
What Is the Difference Between Zero-Rated and Exempt Supplies?
Zero-rated supplies are taxable at 0%, so they are reported on your VAT return and allow you to reclaim related input VAT. Exempt supplies, such as postage stamps and most financial and insurance transactions, are outside the VAT charge, and this can affect how much input VAT you can reclaim. Getting this distinction right is important for accurate VAT returns.
What Is the Difference Between Output VAT and Input VAT?
Output VAT is the VAT you charge on your sales, and input VAT is the VAT you pay on your business purchases. On each VAT return you compare the two. If output VAT is higher, you pay the difference to HMRC, and if input VAT is higher, you can reclaim the difference. Keeping accurate records of both is essential for a correct return.
What Must a VAT Invoice Include?
When you add VAT to an invoice, it should be charged at the correct rate and show your VAT number and the total amount of VAT. Valid invoices are also the evidence you need to reclaim input VAT on your own purchases, so they should be kept safely. We can help you set up invoices that meet the requirements.
How Often are VAT Returns Filed and Can I Reclaim VAT?
VAT returns are usually filed quarterly. You can normally reclaim input VAT on business purchases, provided you hold valid invoices as evidence. If your input VAT is greater than your output VAT in a period, you can reclaim the difference from HMRC. Accurate records and timely filing help you avoid errors and penalties, and we can prepare and submit your returns for you.