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VAT - Value Added Tax

A form of tax charged on most goods and services in the UK. A VAT registered business generally charges VAT on their business sales and reclaims it on their business purchases. The collection of VAT is administered by HM Revenue and Customs (HMRC). VAT registration is compulsory once a company’s profits exceed the threshold of £82,000 * for any rolling 12 month period. VAT is by and large calculated at 20%* of the sale value, although rates differ on selected products and services.

* quoted figures correct at the time of writing