VAT APPLICATION

We can prepare the VAT registration paperwork for your Company for just £35.00 (plus VAT) when placing an order to form a company with Spiegel & Utrera, Ltd.

VAT is a tax on consumer expenditure. It is collected on business transactions, imports and acquisitions If you are in the business of supplying goods or services, VAT will be payable if the supplies are made in the United Kingdom or the Isle of Man; by a taxable person; in the course of furtherance of business and are not specifically zero rated or exempted.

You must charge VAT if you are selling new and used goods, providing hire services, providing hairdressing services and decorating services, charging admissions to buildings or if you are a self-employed person providing supplies.

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Remember, even if you are not required to register for VAT, you may voluntarily register for VAT so that you can reclaim VAT you paid on goods sold by you, which are called "taxable supplies." With a new business this can save you substantial amounts of your product costs as the VAT paid is generally 17.5% of the price you paid! This is money you can claim back and reinvest in your business.

Also, if you plan to claim an exemption from paying VAT because most of your supplies are zero-rated, you must register and request the exemption. VAT registration is necessary to show that on any goods upon which VAT is due which you supply, that your input tax is more than your output tax and therefore no VAT payment is necessary. You must monitor your taxable supplies to determine if liability arises. If so, you will have to apply again for exception.

You are not required to register until your charge supplies exceed 58,000 pounds in any month or in the previous 12 months or at any time you expect the value to exceed that value within the next 30 days. BUT REMEMBER, IF YOU DECIDE TO WAIT TO REGISTER, YOU CANNOT CLAIM BACK VAT PAID ON SUPPLIES PURCHASED FOR YOUR TAXABLE SUPPLIES.

What about sales I make to other countries?

Those sales are know as distance sales. Each country has a statutory limit. Once a foreign company makes distance sales of £70,000 pounds worth of goods to the UK, you must register to charge VAT in the UK.. If you are selling goods in the UK such as tobacco and alcohol from another EU State, the excise duty and VAT must always be accounted for - you must register for VAT and excise duty in the UK.

Are there any supplies for which you do not have to charge VAT?

Zero Rated supplies include: most foods, but not meals in restaurants or cafes or hot take away food and drink; books newspapers; young children's clothing and shoes; exported goods; most prescriptions dispensed to a pharmacist; and most public transport services

The standard rate is 17.5 % for most goods and services. The reduced rate is 5% for fuel and power used in the home and by charities, and women's sanitary products. The zero rated supplies are set forth above.