VAT & Indirect Tax
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What is VAT & Indirect Tax?
Value Added Tax (VAT) and Indirect Tax are both taxes charged on goods and services. Still, unlike direct taxes such as income tax, they are not directly imposed on individuals or businesses. It is added to the price of goods and services at every stage of production and distribution. It can be pretty high, often over 20%.
Let’s look at a typical example of an indirect tax: suppose you want to buy a refrigerator from a store. The store prices the fridge at $500, but they also add a VAT of, let’s say, 10%. The final sale price will be $550 ($500 + 10% VAT).
The refrigerator manufacturer collects the VAT from the sale price and pays it to the government. You will see the cost of the refrigerator on his receipt before the Value added tax is added, but you l still have to pay the total price, including the VAT.
Proper Tax Planning Can Minimise And Improve Cash Flow
The rules are constantly changing, and businesses must stay informed about the latest regulations to stay compliant and avoid any penalties or fines. To remain compliant, businesses must stay aware of changes to Value Added Tax and Indirect Tax rules and exemptions.
Some Important Things To Keep In Mind About Vat & Indirect Tax:
- Rates and exemptions can change depending on economic and political pressures, so staying current is essential.
- Some countries may have strict procedural requirements for claiming tax credits and deductions.
- However, claiming previously unclaimed credits in future tax years is also possible.
- More countries are changing their rules on where cross-border transactions are taxed.
- Suppliers may need to register and learn about the practices in the countries they sell to.
- Digital platforms may now have more responsibility to report and withhold VAT on e-commerce transactions, which may lead to more scrutiny of underlying merchants.
- Many countries now require businesses to invoice electronically and obtain government approval before issuing invoices, known as the "clearance model."
Why You should take our Vat Indirect Tax Service
We offer an affordable and professional service related to various VAT Indirect Tax related matters, such as:
- VAT registration for your Business
- Providing advice on how to plan and manage your VAT
- Helping you choose the best VAT scheme for your business
- Keeping track of your VAT transactions
- We make sure they match up with your records
- Assisting you with completing your VAT returns
- Planning to prevent potential issues with HM Revenue & Customs.
- Representing you and negotiating with HM Revenue & Customs if you have a dispute,
- We will represent you in tribunals if needed.