A.W.BECKINSALE & CO.

VALUE ADDED TAX

What is it

Value added tax (VAT) is a tax on goods and services consumed in the UK. It is levied on goods and services produced in the UK and on imports into the UK. The basic principle of VAT is that it is a tax borne by the final consumer.

Value added tax (VAT) came into force in the UK with effect from 1 April 1973. It is a tax on consumer expenditure, and is thus classified as an indirect tax.

VAT is the common consumer tax adopted by EC member states. Its main features are set out in a series of Directives made by the EC Council of Ministers, which have been translated into statutes and statutory instruments made by Parliament.

You must register for VAT if :

  1. at the end of any month the total value of taxable supplies you have made in the past twelve months or less is more than £56,000. or
  2. at anytime you expect that the value of your taxable supplies will be more than £56,000 in the next 30 days alone.
  Standard
Rate		 Registration Limit Deregistration Limit
% £ £
  
2003 / 2004 17.50% 56,000 54,000
2002 / 2003 17.50% 55,000 53,000
2001 / 2002 17.50% 54,000 52,000
2000 / 2001 17.50% 52,000 50,000
1999 / 2000 17.50% 51,000 49,000
1998 / 1999 17.50% 50,000 48,000
1997 / 1998 17.50% 49,000 47,000
1996 / 1997 17.50% 48,000 46,000

The Spring 2003 Budget announced that businesses currently trading above the VAT threshold who have not registered for VAT can now regularise their position without incurring a penalty.
Under the new scheme, to run from the 10th April 2003 until the 30th September 2003, a business that notifies its liability and registers for VAT will not incur a penalty. This is provided the arrears of tax are paid in full and all returns with payments are furnished for a full 12 months thereafter. Failure to adhere to the conditions of the scheme will result in the original penalty liability being imposed.

Petrol

 Scale Charge 1400 or less VAT due per car Scale Charge 1401 to 2000 VAT due per car Scale Charge 2001 or more VAT due per car
 
From 01.05.02 226.00 33.65 286.00 42.59 422.00 62.85
From 01.05.03 237.00 35.29 300.00 44.68 442.00 65.82

 

Diesel Scale Charge 1400 or less VAT due per car Scale Charge 1401 to 2000 VAT due per car Scale Charge 2001 or more VAT due per car
 
From 01.05.02 212.00 31.57 212.00 31.57 268.00 39.91
From 01.05.03 225.00 33.51 225.00 33.51 283.00 42.14