VAT Rates and Registration Limits

Rate of VAT

The Standard rate of VAT is 17.5%.

Registration

The annual registration limit increased by £3,000 to £67,000 from 1 April 2008  A trader is required to register if
     a) Turnover of £67,000 is expected within the next thirty days.
or b) The trader at the end of any month has exceeded turnover of £67,000 in the past twelve months.
For those considering cancellation of their registration their turnover must not excees £65,000 in the next 12 months.

Fuel Scale Charge

The fuel scale charges for VAT apply where cars have private use and where input tax is claimed on fuel. The basis of calculating the charge is based on the carbon dioxide emissions.

VAT fuel scale charges for return periods commencing on or after 1 May 2008

VAT fuel scale charges for return periods commencing on or after 1 May 2007

Rates for monthly returns or other non regular VAT periods are adjusted pro-rata.

Cash Accounting Scheme

The annual turnover limit below which business can start to use the Cash Accounting Scheme is £1.35 million. Under this scheme a business accounts for VAT on a receipts and payments basis as opposed to an invoice basis. This is aimed to help cash flow for the smaller business so that VAT does not have to be paid to HM Customs & Excise prior to payment being received from the customer.

The annual turnover limit above which businesses must leave the scheme is £1.6 million.

VAT Flat Rate Scheme - How does the scheme work?

The flat rate scheme saves you time by removing the need to calculate and record output tax and input tax to calculate the net VAT due to Customs. You simply record the VAT inclusive value of all your business supplies in a period -including exempt supplies. You then apply the flat rate percentage for your trade sector to your total income and that is the VAT you pay. A list of the flat rate percentages is shown below.

If you are making supplies to other VAT registered businesses, you give them a VAT invoice charging VAT at the normal rate for the supply (not the flat rate percentage).

Whether the scheme is beneficial will be a complex decision and should be discussed with your George Hay adviser.

Agriculture not elsewhere listed	6.5
Membership organisation Retail of goods not elsewhere listed Wholesale of food or agricultural products	7
Retail of pharmaceuticals, medical goods, cosmetics or toiletries Sport or recreation Retail of vehicles or fuel Wholesale not elsewhere listed	8
Manufacture of food Library, archive, museum or other cultural activity Printing Vehicle repair	8.5
Packaging Building or construction services where materials supplied Social work Agricultural services	9
Rental of machinery, equipment, personal or household goods Manufacture of textiles or clothing	9.5
Forestry or fishing Other manufacture not elsewhere listed Mining Personal and household goods repair services Photography Publishing Transport, including freight, removals and taxis Travel agency	10
Hotels or accommodation	10.5
Advertising Animal husbandry Manufacture of fabricated metal products Investigation or security All other activity not elsewhere listed Veterinary medicine Waste and scrap dealing	11
Estate agency or property management Secretarial services	11.5
Entertainment, excluding television, video and film production Financial services Laundry services	12
Business services not elsewhere listed	12.5
Restaurants, takeaways or catering services Hairdressing Real estate activity not elsewhere listed	13
Computer repair services Management consultancy Accountancy and book-keeping Architects Lawyers and legal services	13.5
Computer and IT consultancy or data processing Building or construction services where primarily only labour supplied	14.5