vatonline.org/ File VAT Online – Is It Easy To File And Pay? VAT is a consumption tax levied on the goods and services which you buy. VAT is added to the price charge by businessman to business and non- business customers. The purpose of VAT is to generate revenues for the government. All the countries of the European Union (EU) are required to charge VAT and collect it in time. Different countries have different policies and hence the tax amount also varies. How is VAT levied in UK? VAT is a tax levied on most goods and services that VAT-registered businesses sell in the UK. It is also charged on some goods and services that are imported from countries outside the European Union (EU), and from other EU countries. The rates applicable for VAT in UK are depending on the goods or services the business provides. There are three rates of VAT. The rates are: standard – 20 per cent reduced – 5 per cent zero – 0 per cent The Standard Rate: The standard rate of VAT is termed as a default rate. It is the rate that is charged on most goods and services in the UK unless it has been identified as being reduced or zero-rated. The Reduced Rate: For some goods and services, rates of VAT in UK have been reduced. These are some examples of goods and services that may be reduced-rated, depending on the product and the circumstances of the sale: power and domestic fuel sanitary and hygiene products install energy-saving materials children car seats The Zero Rate: Here are a few examples of some services and goods that are considered in the category of zero-rated. These are mainly categorized on the basis of conditions of sale and on the purchased product. food – but not meals in restaurants or hot takeaways books and newspapers children’s clothes and shoes public transport Exempted Items There are certain exempted items which do not stand under the purview of VAT. insurance providing credit education and training, if certain conditions are met fundraising events organized by charities in certain conditions membership subscriptions, if certain conditions are met services offered by dentists and doctors Items which are outside the scope of VAT are: non-business activities Statutory fees Is It Easy To File And Pay VAT Online? All businesses now are supposed to submit their VAT returns online and pay it electronically. The online service is very user friendly and easy to operate. You can easily file VAT online by using your unique user id and password. If you are VAT-registered then you have to file VAT returns at regular intervals. The return shows both input and output tax. Features of VAT Online Services There are number of useful features which encourage users to file and pay VAT online Secure transactions - The transactions done are completely 100% secure and safe. The transactions are encrypted with keeping in mind the commercial standards. The enrolled individual will get a unique User ID and password. These details are supposed to be kept confidential by the individual and are not to be shared with anyone. Real Time Speed- The speed of enrolling and filing Vat online just takes few minutes. You can easily file VAT online as soon as you have registered for VAT online services. Availability of Service – VAT online services are available day and night for the users. The purpose of day and night service is to provide convenience to the users in paying VAT online. Accuracy – The online service helps to reduce errors through automatic checks. It has the feature of automatic correction and calculation. The details are entered automatically in the boxes on the basis of the prior information filled. Reliability- The user is relieved from the worry of lost and delay post because the tax filer receives online acknowledgement along with a unique submit reference number. The user can take a print of the copy and keep it with him or her for future reference. If you have registered for VAT, then you should: Sell products and at a cost including VAT You should reclaim the VAT you pay when you buy goods and services for your business. When you start to use online services, you should follow these steps orderly: Firstly, you need to check with your accountant or HMRC what rate of VAT applies to the goods and services you sell You need to find out which accounting scheme will suit your business It is recommended to use accounting software approved by HMRC so as to handle record keeping, invoices and paying VAT returns online. There are different schemes to for paying VAT online such as cash accounting, flat rate and annual accounting schemes. VAT Thresholds If you own a business and your total VAT taxable earnings for the previous financial year exceeds £79,000, it is your duty to get registered for VAT. The amount which is taken as the standard is called as VAT threshold. This figure is not the same every year, so you have to check and verify the current amount of threshold which changes once a year as announced in the budget. The VAT taxable turnover means the turnover including only those goods and services on which an owner charges VAT. It does not include those goods which are exempted and lie out of the scope of VAT. You are under a compulsion to register for VAT if either of the following conditions applies: If you are uncertain and think that the VAT taxable income might exceed the threshold value within the coming 30 days. Or if you acquire an ongoing VAT-registered business The question arises what if your turnover is below £79,000? There is also a VAT threshold value for deregistration which is £77,000. So, if your total VAT taxable earnings for the previous financial year is equal to or less than £77,000 or you expect the earnings to fall in the coming 12 months to £77,000, you can follow the below two choices: Either stay registered Or get the VAT registration cancelled. Filing VAT online is easier and one can easily come over the issues by getting it done under professional guidance.
Posted on: Wed, 09 Oct 2013 05:40:49 +0000
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