VAT - Value Added Tax
Value Added Tax​
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This Tax is added to your selling price, selling an item for £100, costs your customer £120.
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If you sell over £85,000 per year you have to VAT register.
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MTD, Making Tax Digital means you now have to file VAT returns electronically via Xero and FreeAgent.
B4Bookkeeping can manage your VAT in Xero and FreeAgent
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Types of VAT
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There are two main types of VAT, Standard and Flat Rate.
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Standard VAT means 20% you have to pay and claim 20% on your Sales and Expenses.
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Flat rate VAT means you still Charge 20% on your sale but only pay a % based on your type of business, e.g. Photographer 11%.
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e.g. the £1200 sale has £200 VAT; under the flat rate you pay £132 to HMRC.
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B4B can manage all this for you without any stress.
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MTD - Making Tax Digital
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The Government made it compulsory to file VAT digitally, both Xero and FreeAgent enable this.
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More taxes are becoming MTD over the coming years.
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Types of VAT
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Standard rated - 20% e.g. Chocolate biscuits
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Zero-rated - 0%, e.g. Children's clothes, milk
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Exempt - No VAT, e.g. Health services
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Reduced rated - 5%, e.g. Electricity and water
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B4Bookkeeping can help you get VAT registered and advise on what VAT rate to use.
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