What is the Current VAT Rate
VAT or the value added tax often change as years pass by. The reason behind this is that VAT rates depend on the prices of certain products or services. Ever since it has been approved and operating, VAT rates are everywhere. It actually became a burden for most people in the long run.
And if you are into a business, then you most certainly need to be updated of the current VAT rate so that you won’t find it very bothersome.
The Current VAT Rate
Value Added Tax or VAT is the tax being attached on the final expenditure of some particular goods and services in the market. It is collected in each stage of production and distribution. In this year, on the month of January to more precise, there are already several VAT rates in UK. However, basing form this rate, the standard rate is 17.5%. On the other hand, the VAT registration threshold is £70,000. This was stated and recorded on the month of April this year. So if the value of your taxable goods in the past twelve months exceeds that of the current threshold, then you must register for VAT again. This threshold will be harness from this year until the next. This typically increases each tax year by £1,000 or so. On the other hand, if your business turnover is below the current threshold, you still need to register for VAT. Doing this might be advantageous and beneficial to your business. Also, you have to commit it to your memory that turnover does not only refer to the profit but also to the amount of money circulating in your business.
The Importance of knowing the VAT Rate
Knowing the VAT Rate is very important not only to the consumers but also to those engage in every type of business. There are also other VAT schemes that you need to know. It will be you who will be benefited a lot of you know these things. One benefit is lesser paperwork. Another is that you can save time. You must also keep a record of your VAT rates. That way you can keep track of it. So that once you receive less output than input tax in a VAT period, the HMRC will refund the difference. But if it happens the other way around, you will pay the difference to the HMRC. Input tax refers to the VAT being paid by the business establishment on all the consumption that it makes. The output tax, however, is the charged Vat on all the sales of the business.
Furthermore, there are also obligations that you have to fulfill once you are a VAT registered. One of these obligations is that you will have to update your invoicing templates. The sole reason for this is for you to take account of the supplementary tax which you need to lay on your customers hands. There are usually green VAT returns in each quarter on most business establishment. Upon receiving this, you should then directly send your computations or calculations to the HMRC. There are two scenarios after this; it is either you pay the VAT owed or you get a refund. And for your own good, you should always aim for the second scenario.
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