Value added tax (VAT) know as GST in some countries is a tax which is applied to the products and services that are Vat registered businesses.
Vat is applied on the selling and purchase of good in UK.Differnet companies Collected the tax on the behalf of HM revenue and customers.There is categorization of goods and services some are Vat-exampted and some are Vat-rated. Business have to registed for Vat when there turnover is over £85,000.They can also registered if there tuenover is less then £85,000.
Vat is charged on dfferent goods at different levels and the current standard rate mostly apply on products is 20%.
Vat reduced-rate is 5% which is applied to children's car seats, domestic usage of gas and electricity.
There are also the products and services which are known as Vat-exampt means 0% Vat on those pproducts and services.
You can calculate the the Vat by using Our Vat calculator tool you can add or remove Vat from any amount.
Types of Vat
Standard Rate
This is the most commonly used VAT in the UK. In UK Currently the standard rate of Vat is 20% which is applied to majority of products and services. This is rate is applied to the servies like Consultency , software development services , event shooting and many more.
Reduced Rate
In the UK, the Reduced rate of Vat is 5%, which is applied to selected products and services. This is rate is applied to the servies like gas and electricity for domestic usage , home renovation , toy car seats.
Zero Rate
Many countries give privelage on some of the goods by making them Zero-rated or Exempt.The Vat rate you charge to your customer is 0% but you still have to go with your Vat return. The goods includes the aircraft repair and maintinance, baby wears,childrens cloths and footwears,helmets,proactive boots.