This document provides an overview of Value Added Tax (VAT) in the UK. It explains that VAT was introduced in 1973 and is charged on most goods and services at either a standard 20% rate, reduced 5% rate, or 0% zero rate. VAT registered businesses charge VAT on sales and can reclaim VAT paid on purchases. Filing quarterly VAT returns involves reporting output tax charged to customers and claiming back input tax paid to suppliers. Certain goods and services are exempt or zero rated under the VAT system.

1. Introduction to UK
Value Added Tax

2. This presentation focus on giving
brief overview of
Value Added Tax

3. Introduction to Value Added Tax In U.K
• VAT introduced in UK on 1/4/1973
• VAT is a tax charged on most of the goods and services that
VAT- registered provide in U.K. It is also charged on some
goods imported from other countries.
• When a VAT-registered business buys goods or services they
can generally reclaim the VAT they have paid

4. Rates of VAT
• There are different VAT rates, depending on the goods and
services that are bieng provided. Currently there are these
three rates:
• Standard rate - 20%
• Reduced rate - 5%
• Zero rate - 0%
• The standard rate if VAT is the default rate and charget on
most of the goods and services in U.K unless they are
specially identified as reduced rate or zero rate.

5. What is VAT charged on
• VAT is charged on any goods and services that you provide in
the UK that are VAT taxable. VAT has to be charged on the
full sale price, even if you accept goods in part exchange or
through barter instead of money.
• The VAT you charged on sale of your goods is called ‘output
tax’ and the VAT you pay when you but goods is called ‘input
tax’.

6. Who charges Vat and Vat is charged on
• VAT-registered business add VAT to sales price of most goods
and services they proivide.
• If you're a business and goods or services you provide which
comes under “taxable supplies” you'll have to register for VAT
if either
• Your turnover for previous 12 months have gone over
certain limit called VAT threshold
• You think your turnover will soon go over the limit.

7. Filing your VAT returns
• You'll need to submit your VAT Returns at a regular
interval- usually quarterly and sent them to HMRC. The
returns shows:
• If the amount of output is more than the input tax, then
you send the report to HMRC with the return.
• If your input tax is more than the output tax, you claim
the difference back from HRMC.
• There are special schemes which can be helpful to the
business to pay VAT

8. Examples of Reduced rate items
• Some of the examples of goods and sevices which can be
reduced-rated, depending on the product itself and the
circumstances of the sale:
• Domestic Fuel and power
• Installing energy saving material
• Sanitary hygiene products
• Children's car seat
• This is the compleste list of redyced-rate.

9. Items not covered by VAT
• Items which are exempted from VAT include:
• Insurance
• Providing credit
• Education and training(only if some conditions are meet)
• Fundraising events by charity
• Membership subscription
• Most services provided by doctor and dentist
• Selling, leasing and letting of commercial land and building

10. Items not covered by VAT
• There are some Items which are not in the UK VAT system at
all. They are not taxable supplies and no VAT is charged on
them. Such items include:
• Non-business activities like hobby- for example- you might
sell some stamps from your stamp collection.
• Statutory fees

11. VAT Helpline
• If you cannot find the all your answers on HM revenue and
customer(HMRC) website, you can ring the VAT Helpline and
can get all your doubts clear.
• Before ringing make sure to keep in hand your VAT
registration number and postcode. This is necessary as they
will need that to keep record of your call.