When do I pay VAT?

The deadline for paying HMRC submitting your VAT return online are usually the same-one calendar month and seven days after the end of an accounting period.

VAT, or Value Added Tax, is a tax that is applied to goods and services in the UK. It is a type of indirect tax, which means that it is collected by businesses from their customers and then paid to HMRC. In the UK, the standard rate of VAT is 20%.

For those who are just starting a business, or are looking to set up a business, it is important to understand when you need to pay VAT and how it works. This article will explain when you need to pay VAT and how to go about doing so.

When Do I Need to Pay VAT?

If your business is registered for VAT, then you will need to pay VAT on all goods and services that you supply to customers. This includes sales of goods, services and digital products. You will also need to pay VAT on any goods or services that you purchase from other businesses.

In order to register for VAT, your business must have a taxable turnover of more than £85,000 in the last 12 months. If your business is below this threshold, then you do not need to register for VAT. However, you may still choose to do so if you think it will be beneficial for your business.

How Do I Pay VAT?

Once you are registered for VAT, you will need to submit a VAT return to HMRC every quarter. This return will include details of all the sales and purchases that you have made in the previous quarter, as well as the amount of VAT that is due.

You can submit your VAT return online, or you can use HMRC’s VAT helpline. You will need to pay the amount of VAT that is due within 30 days of the end of the quarter. If you do not pay the VAT on time, then you may be liable for a penalty.

What Are the Different Types of VAT?

In the UK, there are three different rates of VAT. The standard rate is 20%, but there are also reduced rates of 5% and 0%. The reduced rates apply to certain goods and services, such as energy-saving materials, children’s car seats and books.

In addition, there are two other types of VAT: the Flat Rate Scheme and the Cash Accounting Scheme. The Flat Rate Scheme is a simplified way of calculating VAT, while the Cash Accounting Scheme allows you to pay VAT on goods and services when you receive payment, rather than when you make the sale.

Conclusion

VAT is an important part of running a business in the UK. If your business is registered for VAT, then you will need to pay VAT on all goods and services that you supply to customers. You will also need to submit a VAT return to HMRC every quarter and pay the amount of VAT that is due within 30 days. There are three different rates of VAT, as well as two other schemes that you may be eligible to use. It is important to understand when and how to pay VAT in order to ensure that your business is compliant with the law.