VAT registered – What does it mean?
What is VAT? VAT (Value Added Tax) is a tax added to most products and services sold by VAT-registered businesses.
When do you need to register for VAT? Businesses must register for VAT if their VAT taxable turnover is more than £85,000. You can also register voluntarily if turnover is less than £85,000.
As a VAT-registered business you must:
- Include VAT in the price of all goods and services at the correct rate
- Keep records of how much VAT you pay for things you buy for your business
- Account for VAT on any goods you import into the UK
- Report the amount of VAT you charged your customers and the amount of VAT you paid to other businesses by sending a VAT return to HM Revenue and Customs (HMRC) - usually every 3 months (can also be monthly or annually)
- Pay any VAT you owe to HMRC
The VAT you pay is usually the difference between any VAT you have paid to other businesses, and the VAT you have charged your customers.
If you have charged more VAT than you have paid, you must pay the difference to HMRC.
If you have paid more VAT than you have charged, HMRC will usually repay you the difference.
