An Introduction to what VAT is, that is my topic in this weeks I Hate Numbers podcast. In this series of podcasts, I am going to look at what VAT is and how it affects your business.
Are you a business owner and want to know more about VAT?
What is it, how does it affect your business, and what's the system like? If so, then this podcast will be perfect for you. In this first part we'll look at what VAT is, why businesses need to pay it and how they do that.
Listen now to find out more.
So in let's start with what is VAT? Well, value added tax or to give it its correct name is a form of consumption tax which means that it's paid when goods and services are bought and sold rather than when they are produced like income tax for example. It was introduced in 1973 as part of a move towards taxing expenditure rather than income but has been around in various forms since 1932 under different names such as purchase tax or turnover tax depending on where you lived at the time.
Roles and responsibilities of VAT registered businesses
Do you have a business? Are you registered for VAT?
If so, then you are part of the millions of unpaid tax collectors employed by the government in the UK and around the world. You join them as soon as your turnover reaches the registration limit, currently £85,000 over the last 12 months. VAT is collected on behalf of HMRC by businesses that are registered for VAT.
In general it does not affect your profitability but there may be some exceptions to this rule depending on what type of business you run and how much turnover you have.
Moreover, if you worried, confused, or need help with understanding VAT, you’re not alone. In fact, many businesses find themselves in the same situation. This podcast on An Introduction to what VAT is will help.
Listen to find out more.
My mission is to inform, inspire and educate you to get closer to your numbers. You can make more profits, save tax and time, improve your well-being and your money mindset.
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