What is VAT, how to go about VAT registration, is it mandatory, would VAT returns be very difficult to file, are few of the various VAT related questions, business are often confronted with, while undertaking business transactions in UK. It seems a complicated concept, with too many strings attached. And if you too are confused with the conceptual nitty-gritty, this brief write up can assist.

To begin with, please understand that VAT, an abbreviation for the Value Added Tax, is not impossibly complicated. Certainly there are a number of procedural details to comply with, but VAT is manageable.

What is VAT (Value Added Tax)?

VAT, also known as Goods and Service Tax (GST), is an indirect tax, levied on all business transactions which entail transfer of goods and / or services. The mandatory filling requirements depend upon the business turnover. VAT is paid to HM Revenue & Customs, with appropriate records to validate.

As apparent, registering with VAT and thus filling returns is obligatory only for those establishments, which record taxable supply of goods of more than £64,000 in 12 months, for the rest it is a voluntary option. Voluntary registration might make sense, if the idea is to reclaim a proportion of the input tax or increasing business credibility. But then this would of course require maintenance of appropriate VAT records. Registration can be done both online or offline. Post registration, filling returns is the next step. This in turn implies tax calculations, managing exemptions and filling formalities.

If the stated overview on what is VAT question, seems too huge a concept to manage, authorized tax consultants and associates like Novik & Co., could be referred to. Novik ltd., as a tax management partner, assists at every stage from counseling to registration to computation to filling.