Value added tax

Registered businesses charge Value Added Tax (VAT) on their sales. This is known as output VAT and the sales are referred to as outputs.

Similarly VAT is charged on most goods and services purchased by the business. This is known as input VAT.

There are three rates: standard which applies to most goods and services, reduced rate for some goods and services such as home energy and zero rate goods and services, for example, most food and children's clothes.

Some supplies are exempt from VAT for example postage stamps, financial and insurance transactions.

A business is required to register for VAT if the value of taxable supplies exceeds the annual registration limit.

The government has frozen the VAT registration and deregistration limits until 1 April 2022.

Rates

Standard: 20%

Reduced: 5%*

* 12.5% for hospitality and tourism from 1 October 2021 to 31 March 2022.

Limits

Annual Registration Limit (1.4.21 to 31.3.22): £85,000

Annual Deregistration Limit (1.4.21 to 31.3.22): £83,000

Get in touch

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Rochdale
CCM | Carter, Collins & Myer, Chichester House, 2 Chichester Street, Rochdale, Lancashire OL16 2AX

01706 860255


Ashton
CCM Ashton (Formerly Your Tax Shop), Suite 1.08, Clarence Arcade, Stamford St W, Ashton-under-Lyne OL6 7LT

0161 339 5989


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The term ‘Board Director’ is used to refer to a statutory director and principal of Carter Collins & Myer Ltd as registered at Companies House. Any other designations that include the term ‘Partner’ or ‘Director’ are not registered statutory directors or principals and are marketing terms used to describe representatives of the company.

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