An Introduction to Charging and Accounting for VAT
- Price: £3.60
- Published: April 2015
- Type: Business Information Factsheet
- Format: PDF
Following registration for Value Added Tax (VAT), VAT-registered traders are responsible for charging the correct amount of VAT to customers, keeping VAT records and a VAT account, submitting VAT returns and paying any VAT due to HM Revenue & Customs (HMRC). Traders can also reclaim the VAT paid on certain purchases made before registration (subject to time limits) as well as reclaiming VAT paid on purchases following registration.
HMRC is responsible for ensuring that VAT-registered traders comply with the legislation relating to VAT and meet their responsibilities with regard to registering and accounting for VAT and paying the tax due.
The legislation covering VAT is complex and it is important to seek professional advice or contact HMRC for guidance to ensure compliance with current law.
This factsheet briefly explains the VAT process, and also covers starting to charge VAT, calculating the VAT to charge, what must be shown on VAT invoices, and record keeping for VAT accounting. It explains what a VAT return is, VAT accounting schemes, how to account for VAT through a VAT return, paying VAT, what happens if a VAT return is not submitted, and the penalties for inaccuracy or late payment of VAT.