The Different Value-Added Tax Rates in the UK – A Guide by Tax Accountants

 It can also be confusing and daunting to file your VAT returns. There's a workaround our tax accountants in London have.

Besides knowing how to measure it properly, you also have to take note that sometimes the actual VAT rates will change.

If you're not patient, there's a fair chance you're going to miss out on the target entirely and have to start over.

It's crucial that you keep yourself updated with the latest VAT rates to prevent that from happening. It's crucial that you keep yourself updated with the latest VAT rates to prevent that from happening. Let our tax accountants find a solution to your problems related to taxation.



Tax accountants Guide: What is VAT?

The selling of goods and services in the UK is subject to Value Added Tax ( VAT). It is a form of sales tax because, as per our tax accountants, it is paid on products that individuals buy. VAT is also an indirect tax which is paid on behalf of the government by corporations.

No VAT– Know more by involving our tax accountants

Some company transactions are VAT excluded. For example, there is no VAT applicable to bank transfers, employee compensation, and tax payments, which means you do not need to report them when filing your VAT returns.

A standard rate of 20 percent

An invoice or a receipt that indicates the amount of VAT deducted will be given to you by suppliers that charge the regular VAT rate. If it comes into any of the other sections to be addressed in this article, it encompasses all transactions.

Reduced rate of 5 per cent

For lighting and heating bills, the reduced VAT rate of 5% is applied. It is also imposed on sanitary goods.

Zero rate 

Zero-rated sales and transactions are those that have VAT but at a rate of zero percent applied to them. They're not legally VAT-free, though. Expenses like fares, rail travel, books, and newspapers are included in the zero rates. Let it be clarified even more by our tax accountants.
The zero rates would also apply if your company sells goods outside of the UK. You can earn standard-rated VAT if you make a sale to a non-VAT registered EU company or to a general public member.

Exempt

Company transactions that are excluded from VAT exist. Your insurance, finance and credit costs and royal mail postage are some of the expenses that come under this category. Since they are excluded, the VAT return does not contain these expenses.

Conclusion

When you file a VAT return, these are the VAT rates that you should bear in mind. To make the process so much simpler, you can use a VAT calculator online as well.
For a business owner, filing a VAT return can be a lot to manage when you already have your hands full of so many obligations. Investing in an affordable accounting firm that will help you figure out your VAT returns and other taxes is the perfect way to do this. Trusting a professional with your VAT returns will minimise mistakes and make the entire process much quicker.

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