What is VAT ? VAT, or very awkward tax as I like to call it confuses and scares many business owners. Above all, Fear not! I'm going to talk to you about what VAT is, how it affects your business, and enlighten with how the VAT system works.
This is part 1 of a series that will set the scene, give you the framework and overview you need to know about VAT to set yourself on the right track
What’s covered in this video
Watch to see
- what VAT is,
- how it affects your business,
- the way the VAT system works
There is an illustration with numbers to make it easier to understand.
Value Added Tax principles are straightforward, the application and rules not always so. Moreover, what we know about Value Added Tax is that
- It is an indirect tax that is administered and collected by VAT registered businesses.
- The tax is actually paid by consumers and businesses not registered.
- It is charged on most goods and services
- VAT is operated in over 160 countries around the world. In the UK alone it brings in around 134 billion pounds worth of revenue into the government's coffers. That represents on average 4,700 pounds per household.
The role and responsibilities of your business.
When your sales get to a certain level, currently £85,000 over a 12-month limit, you must register for VAT. There may be good reasons to voluntarily register for VAT, crazy but true.
Once you become registered for Value Added Tax you join the millions of unpaid tax collectors employed by the government in the UK and around the world.
The only difference is that you get no benefits, pay, training, sick pay and you can only quit when you are no longer registered. There is no bonus or praise for doing a good job, but mess up, innocently or otherwise and it can cost you.
Moreover, my mission is to inform, inspire and educate you to get closer to your numbers. Above all you can make more profit, save tax, save time, improve your well-being, financial understanding and your money mindset. How cool is that?
Get in touch with us to get support with your VAT matters and how to operate and understand VAT. Contact us if you need help figuring out and sorting your financial planning, your tax and other accounting and business matters. For more business and finance , news, advice and tips, don’t forget to subscribe and watch our weekly videos on I Hate Numbers, listen to our weekly podcast I Hate Numbers.
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