ENTERPRISE Thinking about VAT.

VAT - or Value Added Tax - is a tax charged by VAT-registered businesses on the supply of most goods and services. If you are or become VAT-registered, you must charge VAT where appropriate on the goods or service you sell. However, you can also reclaim any VAT you have paid when buying things for your business.
There are three rates of VAT. The most common is the standard rate of 20 per cent. If you want to know more about VAT rates, and charging and reclaiming VAT, watch our video How does VAT work?
Charging VAT affects the price of what you sell and therefore possibly your profits. It's important that you get your VAT calculations correct. If you are not sure how to add or subtract using percentages, try our tutorial Calculating VAT.
You also need to keep records to show how much VAT you have charged and paid. Record keeping is covered in our tutorial VAT and your business.
There's a lot more to learn about VAT, so why not try watching our videos Simplifying VAT and VAT registration and threshold information and look at our tutorial When sales and purchases take place for VAT purposes. You should also look at our tutorials on Setting up and managing a VAT account and Making VAT payments to HMRC to help you get started. Finally you will find a link to take you straight to online VAT registration with HM Revenue & Customs (HMRC).
Please note: Our learning products show ways of working out VAT that HMRC recommends. VAT rates can change, but if they do the calculation methods remain the same. You would need to use different numbers in the calculations, but this information would be available on the website.