12/22/2019 0 Comments What You Need to Know About VATA VAT is an acronym of value-added tax which is charged indirectly to goods and services consumers by the government as a way of ensuring that it collects tax from every citizen. Unlike direct taxes such as employment taxes and corporate taxes which are charged directly, VAT is categorized as an indirect tax because one doesn’t know when they are paying for it. With VAT, you cannot evade paying for it as long as you are buying goods and services you will pay for it indirectly. Read this article to learn what you need to know about vat UK. There is a difference between sales tax and VAT. While these two are sometimes used interchangeably, the truth of the matter is they have different meanings when it comes to paying for them. In most states in the United States, sales tax is only charged at the last point of sale done by a wholesaler or a retailer which means the burden is shifted to the end consumer who is the buyer. In sales tax, the reseller or the wholesaler is not taxed sales tax. While VAT is charged on specific purchases and sells, both the wholesaler or reseller and the end consumer have a duty to pay the VAT, unlike the sales tax which is shifted to the buyer. You can go to the vat official website for more details about VAT. Different countries have varying VAT rates that they charge as a source of income to the government. Before you are subjected to pay VAT as a business you need to register for the VAT services through the government tax website, where your business will be given a VAT account where it will be liable to pay its VAT. Depending on your country, there are some goods and services which are exempted from VAT charges such. Every country has its stipulated way in which tax invoices should be prepared and a stipulated duration of filing the taxes is also given. When you are a registered VAT payer, you need to familiarize yourself with OUTPUT VAT and INPUT VAT. OUTPUT VAT is the amount of money your customers pay as VAT for the purchase of your vatable goods and services such as services offered by a law firm, sale of consumables among others. INPUT VAT is the amount of money you are charged as VAT when you purchase vatable goods and services from another business. To calculate the amount of VAT payable, you subtract your INPUT VAT from your OUTPUT VAT. Click here to learn more about value added tax: https://www.huffingtonpost.co.uk/entry/fact-check-the-poor-wont-pay-the-most-for-the-vat-increase_uk_5c7e84ede4b06e0d4c22ef26.
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