Value added tax

The current VAT percentages and the annual registration and deregistration thresholds.

Registered businesses charge Value Added Tax (VAT) on their sales. This is known as output VAT and the sales are referred to as outputs.

Similarly VAT is charged on most goods and services purchased by the business. This is known as input VAT.

There are three rates: standard which applies to most goods and services, reduced rate for some goods and services such as home energy and zero rate goods and services, for example, most food and children's clothes.

Some supplies are exempt from VAT for example postage stamps, financial and insurance transactions.

A business is required to register for VAT if the value of taxable supplies exceeds the annual registration limit.

The government has frozen the VAT registration and deregistration limits for two years from 1 April 2018.

Rates

Standard: 20% (unchanged from 2018/19)

Reduced: 5% (unchanged from 2018/19)

Limits

Annual Registration Limit (1.4.19 to 31.3.20): £85,000 (unchanged from 2018/19)

Annual Deregistration Limit (1.4.19 to 31.3.20): £83,000 (unchanged from 2018/19)

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Phipps Henson McAllister are registered to carry on audit work in the UK & Ireland and regulated for a range of investment business activities by the Institute of Chartered Accountants in England & Wales.

Details about our audit registration can be viewed at www.auditregister.org.uk for the UK and www.cro.ie/auditorsfor Ireland, under reference number EWC008449569.

This firm is not authorised under the Financial Services and Markets Act 2000 but we are able in certain circumstances to offer a limited range of investment services to clients because we are members of the Institute of Chartered Accountants in England and Wales. We can provide these investment services if they are an incidental part of the professional services we have been engaged to provide.