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VAT Guide for Small Businesses

You have landed on the beginners' guide to Value Added Tax (VAT) in the United Kingdom. VAT is a tax levy added to most goods and services.

WHAT EXACTLY IS VAT: How does Value Added Tax affect my business? As a rule, most goods’ suppliers and service providers charge Value Added Tax (VAT). The tax is ‘added’ or levied to most types of supplies and services. It includes and applies to, selling goods, renting them out, or hiring them. VAT applies to almost all businesses and the majority of self-employed persons.

This sections explains when you need to register for VAT and what are the current rates of Value Added Tax. How does Value Added Tax deregistration work? What are the benefits of the Cash Accounting Scheme and when is VAT registration necessary? This VAT guide for beginners answers all these questions and more.

Value Added Tax Explained for Beginners

Building New Homes and VAT

The guide explains the process of building a new home and VAT refunds. Find out how to reclaim VAT when building new homes or property conversions.

Calculate VAT Taxable Turnover

Simple examples showing how to calculate VAT taxable turnover. The total VATable sales value is the sum of everything you have sold less any sales tax exempt items.

VAT Cash Accounting Scheme

UK businesses can benefit by joining the VAT Cash Accounting Scheme. But, the business must meet thresholds and eligibility criteria in this type of cash accounting for VAT.

VAT Errors and Corrections

Correcting VAT

Learn how to correct VAT errors and adjustments on a return form. You can also contact the VAT error correction helpline to report an error or an inaccuracy.

Reclaiming VAT

There are some items you can claim for and others you cannot reclaim. Find out the process for reclaiming VAT back on business purchases and claiming VAT on vehicle expenses.

VAT Fuel Scale Charge

Work out the VAT fuel scale charge on private use of fuel purchased for a business vehicle. It means you do not need to keep detailed mileage records.

VAT Flat Rate Scheme

Fixed Rate of VAT

A section to help determine whether the Flat Rate VAT Scheme is right for your business. The guide explains the current flat rates of VAT, eligibility criteria, and thresholds.

Flat Rate Percentages

Check the process for working out VAT flat rate scheme percentages 2022. There will be periodic changes to the flat rate scheme so you must use the most current proportions.

VAT Fraud

You can contact HM Revenue and Customs to report VAT fraud online. There is no need to give your name or you can make the report by telephone if you prefer.

HMRC Fraud Hotline
Telephone: 0800 788 887
Monday to Sunday: 8am to 8pm

Note: You may be liable for the tax if you know about or suspect VAT fraud but fail to report it.

VAT in Insolvency Helpline

What are your VAT responsibilities for insolvency? Find out about pre-insolvency and de-registration for Value Added Tax.

VAT Online Services

General Enquiries

Contact HM Revenue and Customs for questions about VAT or for reporting changes to your business.

VAT Online Services Helpdesk
Telephone: 0300 200 3700
Textphone:0300 200 3719
Outside UK: +44 2920 501 261
Monday to Friday: 8am to 6pm
Closed weekends and UK bank holidays.

HM Revenue and Customs – VAT Written Enquiries Team
Alexander House
21 Victoria Avenue
SS99 1BD
United Kingdom

Using VAT Online Services

There is a simple way to submit your VAT return online. You can get quick access by logging in to your HM Revenue and Customs account.

You need a VAT number and an HMRC online account (Government Gateway) to use this service. You get this information when you register your business for VAT.

NOVA Login

The NOVA service lets you inform HMRC that you brought a vehicle into the United Kingdom. Log in to the government website to use the Notification of Vehicle Arrivals (NOVA) service.

VAT Record Keeping

Keeping VAT Records

As a rule, VAT record keeping is part of running a business in the United Kingdom. Find out how to keep records for VAT including invoices and a VAT account.

VAT Visits

How often you get VAT visits and inspections depends on several factors. The guide explains procedures for VAT checks conducted by HM Revenue and Customs.

VAT Registration

Register for VAT

Find out exactly how VAT Registration works and when you must register with HMRC. The section also explains taxable turnover for small businesses and VAT registration thresholds.

Register for VAT in EU Country

You must register in each country or sign up and use the VAT Mini One Stop Shop service. The rule applies even for turnovers below the VAT Registration threshold.

Note: Digital services include telecommunications services, video on demand, broadcasting. It can also include downloadable apps, games, music, eBooks, and software.

Registration Details

The guide explains how to change VAT registration details with HMRC. Changes you must report include the business contact information and bank details.

VAT Record Keeping

Your business must keep VAT records for at least 6 years (or 10 years if you use VAT MOSS billing).

VAT Thresholds

Check the current VAT turnover threshold for the United Kingdom. The section shows this year’s sales tax thresholds in a simple table format.

VAT on Shopping and Services

Value Added Tax is a form of taxation paid on most shopping goods and services. Find out how different rates of tax on shopping and services affect the popular products we use.

UK Rules on VAT for Beginners: Listed Categories Guide for Small Businesses