Added

Value Added Tax UK

Value Added Tax or more commonly known as VAT is a consumption tax based on what the goods or service is valued at. It is not the same as sales tax as some people believe. For example, when a product is taxed it is taxed from the place of origin right down to the destination. With a Value Added Tax, this is a one-time tax and a product or goods can only be taxed once. What makes sales tax and Vat tax different is that the VAT tax is an indirect tax, meaning that the tax is collected by an agency that does not pay out the total cost of the tax.

There are 2 Value Tax Systems, one for the European Union and the other is for Non European Countries. The minimum amount of Value Added Tax for countries in the European Union is 15% and the maximum rate is 25%. In certain countries like India, the Value Added Tax replaced the sales tax but only 20 of the 28 states in India conformed to the VAT and the 8 others have not. In countries like Canada they call the VAT a GST which is a Goods and Service Tax, the introduction rate back in 1991 was 7%; the rate currently is 5% plus the provincial sales tax.

The United States uses a tax called the Single Business Tax. The state of Michigan uses it. But the other states have a sales tax, which is charged to the buyers of the goods only. The sales tax in the United States ranges from 0% to 13% depending on what state you live in. The United Kingdom uses a Value Added Tax, which is 15%; the reduced rate of the VAT is 0% or 5%.

If you live in the United Kingdom, you know that these taxes are put on goods and limited services that are imported from countries that are not in the European Union and on goods and services coming into the United Kingdom. From another EU member. Both individual people and legal entities can be VAT registered. If this applies to you, you have the obligation of calculating the VAT on certain goods or products that you supply and then you must pay VAT into the states budget.

Some basic examples of business supplies that may have Value Added Tax are the selling of new and used goods such as hire purchases. If a business is providing a service such as a hairdresser or a restaurant. The VAT will be added if you charge any type of admission fee for entrance into a building or structure. The VAT is charged to the self-employed that provide a service such as sales people, construction companies and contractors.

But there are some exceptions to the rule; you can be exempt from VAT if you are doing any type of fund raising or charity event. If your goods are servicing the medical profession. If you are offering a certain type of education and or training, if you are selling, leasing or lending land and buildings and if you sell insurance you are exempt from Value Added Taxes.

VAT registration UK
NOVIK Ltd provide VAT registration , VAT refund and constable VAT consultancy

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Wednesday, October 6th, 2010 Grants No Comments

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