If you are a businessman you must know about VAT and how important UK VAT accounting is. But if you want to know more about this particular tax then this article is for you because here you will be given all the information you need to know about VAT. Moreover, you will also learn how special tax accountants for VAT can help you simplify the process. So without further ado, let’s get to know more about VAT and how accountants can help you.
What is VAT Accounting in the UK?
When a product is being manufactured, the raw materials are brought in and they go through a process. After the manufacture, the process in which the product reaches the market and then the consumers is known as the supply chain. So starting from the raw materials to the product’s being brought by the consumer, at every stage, a tax is collected along with the original cost of a product. This tax is known as VAT or Value Added Tax. The current rate of VAT in UK is 20% although some products, goods, and services are exempted from this taxation.
How does accounting take place?
Since at every stage, a product is taxed, the price of the product increases by 20% in the UK when it reaches the hands of the consumer. When the raw materials are bought, there is a 20% tax on that. So when the manufacturer sells the items to a retailer there is a 20% value-added tax on that too. Then when the product reaches the consumer there is another 20% taxation on that. So the taxes that have been collected for each of the goods, at each entry point is calculated at the end of the VAT period. This is called the UK VAT accounting.
How can tax accountants help you?
A report is made upon the prices of the raw materials, shipping, selling to retailers, and then selling to the consumers. It contains all the accounting details and this report is submitted along with the tax amount to the government of the UK. At every VAT period, it can get quite stressful in your office if you are not prepared with a tax accountant to help you out. You will find one of the best online tax accountants who will help you whenever you need help with VAT accounting.
Hiring a separate tax accountant who has experience in dealing with VAT accounting will be worth it because you can’t afford to have errors in VAT payments.