Value Added Tax (VAT)

VAT is charged on things like:

• business sales - for example when you sell goods and ser-vices
• hiring or loaning goods to someone
• selling business assets
• commission
• items sold to staff - for example canteen meals
• business goods used for personal reasons
• ‘non-sales’ like bartering, part-exchange and gifts

These are known as ‘taxable supplies. There are different rules for charities.
Responsibilities
VAT-registered businesses:

• must charge VAT on their goods or services
• may reclaim any VAT they’ve paid on business-related goods or services
• must account for import VAT on their VAT return if they use import VAT this way (known as ‘postponed VAT accounting’)