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Vat

VAT registration is the process of listing your business with the government as active in production and sales.

You must register your business for VAT with HM Revenue and Customs (HMRC) if its VAT taxable turnover is more than £85,000.

You can register voluntarily if your turnover is less than £85,000 unless everything you sell is exempt. You will have certain responsibilities if you register for VAT.

After a business registers for VAT, it can reclaim any VAT paid on company purchases and becomes responsible for:

  • Charging VAT on any goods or services sold (and charging the right amount)
  • Paying any VAT due to HMRC
  • Submitting VAT Returns
  • Keeping VAT records and a VAT account

Companies registered for VAT will be issued a unique VAT registration number. This number should be included on sales invoices and is required for the reverse charge procedure for taxable sales between EU countries.

The standard rate of VAT is 20% and some things are exempt from VAT, such as postage stamps, financial and property transactions.

VAT rates for goods and services

% of VAT What the rate applies to
Standard rate 20% Most goods and services
Reduced rate 5% Some goods and services, eg children’s car seats and home energy
Zero rate 0% Zero-rated goods and services, eg most food and children’s clothes
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CIS stands for Construction Industry Scheme, it’s a tax legislation put in place by HMRC to ensure all construction workers pay their tax. Read more

Some Your client or contractor has to deduct CIS tax from your pay each and every time they pay you. They then pay this tax deduction to HMRC who hold it on your account until your submit your tax return. Read more

Everyone in the UK gets a tax free allowance, this is the threshold before you have to pay any tax. However, as your client has already deducted your tax from earnings under the threshold you can claim it back. Read more

If you have earning over the minimum threshold (£12,500 for tax year 20-21) then you can maximise your tax rebate by offsetting your income with business receipts. Read more

The main thing that you need is your CIS deduction certificates, payslips or your bank statements to prove income and tax deducted. Read more

You can claim back your CIS tax on the 6th April each year for the previous tax year. You then have until the 31st Jan (the tax return deadline) to submit your tax return. Read more

To claim back your tax you need to submit your self-assessment tax return. Read more

A CIS deduction certificate is the payslip that your client should give you each and every time you are paid. It will show the Gross, Nett and Tax deducted amounts that tax2u will need to reclaim your tax. Read more

It really couldn’t be simpler, log in or create your free account, upload your CIS deduction certificates / payslips and our accountants will do the rest. Read more



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