Standard VAT of 20% has become part of our daily life

May 15, 2012 · Posted in Legal · Comment 

Throughout your daily life, VAT is one tax that you are most likely to encounter and in actual fact it’s something that you will most likely encounter on a common basis. The standard 20% VAT is charged on most goods and services right across the board, but as with any type of tax or rule there is always some exemptions which are either not charged tax at all or receive tax at a lower rate due to given Government concessions.

You may be subjected to a different rate of VAT on different goods and services depending on the type of goods and services that you are using or working with. There are also areas where you could claim your VAT back, one example of this is the Agricultural Flat Rate Scheme which entitles farmers to zero VAT on certain animals, products and services. This can be used to help industries which are important throughout the UK.

In some industries different levels of VAT apply and the rental and building industry is one example of where this happens. Here, landlords are often given a choice as to whether or not they wish to claim VAT on their property. In some situations a landlord may choose to claim VAT on their property if they are looking to perform renovations and want to claim aspects of the renovation or repair works back on tax.

In most situations the companies most likely to be eligible for a VAT exemption are healthcare, welfare and education. All three of these sectors are seen as crucial to the development of society and as such are given generous VAT exemptions, but it should be noted that not every element of this industry is exempt and you still need to check carefully for your own business.

In addition to the products and services being VAT exempt there are also situations where charitable donations to an organisation of this type may also be VAT exempt and when you make a donation you could be eligible to claim this back on tax.

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