VAT is a complicated subject, but it’s important that you stay on top of your finances and pay what you owe. Read this article to find out how to do just that – and why requesting a VAT refund could help you along the way.
What is Vat?
If you’re not based in the UK, you may not be familiar with Value Added Tax (VAT). VAT is a tax that is charged on most goods and services sold in the UK. It is also charged on imports from other countries.
VAT is usually charged at a rate of 20%. This means that if you buy a good or service that costs £100, you will actually pay £120 – the extra £20 is the VAT.
However, there are some goods and services that are exempt from VAT, such as books, food and children’s clothes. And some goods and services are taxed at a lower rate of 5% or 0%, such as domestic fuel and power.
If you’re registered for VAT, you can reclaim the VAT you’ve paid on your purchases – this is called ‘input tax’. You’ll then need to pay this reclaimed VAT to HM Revenue & Customs (HMRC).
Why do you need to pay vat?
If you are registered for VAT, you must charge VAT on most of the goods and services that you supply in the UK.
You usually collect VAT from your customers and pay it to HM Revenue and Customs (HMRC). This is called ‘output tax’.
You can claim back any VAT that you have paid on goods and services that you use for your business. This is called ‘input tax’.
The total amount of VAT you pay to HMRC (output tax) minus the amount of input tax you can claim back (input tax) is the net VAT payable.
If your input tax is greater than your output tax, HMRC will refund the difference to you.
How do you pay Vat online?
If you’re a business owner in the United Kingdom, you know that value-added tax (VAT) is one of the most important taxes you must pay. But what if you could pay your VAT online?
Not only is paying your VAT online more convenient, but it can also help you get a refund more quickly. Here’s how to pay VAT online, and why you should request a VAT refund.
To pay VAT online, you’ll need to register for an account with HM Revenue and Customs (HMRC). Once you’ve registered, you can log in and add your bank account details.
Once your bank account is set up, you can make payments through the HMRC website or by using their mobile app. You can also set up direct debit payments so that your VAT is automatically paid each quarter.
When it comes time to file your VAT return, you can do so electronically through the HMRC website. And if you’re due a refund, you can request it online as well.
Paying your VAT online has several advantages. First, it’s more convenient than having to write a check or send in a money order each quarter. Second, it’s faster – you’ll usually receive your refund within 5 working days. Finally, it’s easier to keep track of your payments and ensure that they’re made on time.
Should I claim a VAT refund?
If you’re registered for VAT, you can claim a refund on any VAT you’ve paid on goods and services you’ve bought from other EU countries. You’ll need to fill in a VAT refund form (VAT407) and send it to HM Revenue and Customs (HMRC).
To get a refund, the goods must:
be new
be for your business use only
be bought from another EU country (not including the UK)
-You can’t get a refund if the goods are second-hand, for personal use, or if they’re from outside the EU. Services bought from outside the EU aren’t eligible either.
You can find more information about claiming a VAT refund on the gov.uk website.
Conclusion
Paying VAT online is easy, and it’s a good idea to do so if you’re eligible for a VAT refund. You can request a VAT refund by filling out a simple online form, and the process is usually quick and hassle-free. Whether you’re paying VAT on behalf of your business or as an individual, paying online is the most efficient way to do it.
