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VAT (Value Added Tax)

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Definition: A consumption tax charged at three main rates: standard 20%, reduced 5%, zero-rated 0%. Some items are exempt entirely.

Businesses must register once VAT-taxable turnover exceeds £90,000 in any rolling 12-month period (threshold from 1 April 2024). Different schemes exist for small businesses (Flat Rate, Cash Accounting, Annual Accounting).

Primary source: gov.uk/vat-rates

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