Standard rate VAT: 20% is by far the most common and familiar VAT rate and is currently the UK’s standard rate of VAT.
This has not always been the case: the 1st of December 2008 saw a drop from the 17.5% that had been in place for years to 15%; the 1st of January 2010 brought a return to 17.5%; and the 4th of January 2011 brought the increase to our current rate of VAT at 20%. Should the VAT rate change again in the future your accountant at Integro Accounting will provide you with details and guidance at the time.
In all probability your supplies will be subject to standard rate VAT if you opt to register for VAT or reach the registration threshold. It is however worth double checking this with an accountant before making any assumptions, as there are exceptions and some of these are detailed below:
Zero rated VAT: this is for items that are subject to VAT but where the rate of VAT is 0%. This is more likely to arise in the purchases that you make rather than applying to the supply of your services and will usually apply to: food (but not meals in restaurants or hot takeaways), books and newspapers, public transport. This is why you cannot reclaim VAT on some travel costs that you incur.
Reduced rate: this is the third rate of VAT in use in the UK and applies to things like your home gas and electric bills. The reduced rate is currently 5%.
Exempt items: the above three rates cover all the VAT rates in use in the UK. There are however goods and services that have been determined to be exempt from VAT. For example: insurance; providing credit; financial services; most services provided by doctors and dentists.
Outside of the scope: some items fall completely outside of the UK VAT system and are not counted as taxable supplies. For example: statutory charges such as MoT and congestion charges.
Why Integro Accounting?
Integro Accounting is the UK’s only specialist provider of fixed fee, limited company accountancy services for contractors, consultants and freelancers that was established to an award winning standard – our Practice Manager, Maria Hickmott FCCA, won The British Accountancy Awards’ ‘Accountant of the Year’ in 2011.
We were set up with the vision of providing a service that is the ultimate for the dynamic, busy professional of today in a language you understand.
Integro Accounting have designed a bespoke service for the contractor who is always on the go; never forgetting that one size will never fit all.
The relationship you have with your accountant is the most important factor in our service which is why we will always offer unlimited contact with your own personal accountant; whether that contact is via the phone, email or face to face.
We have our 3 offices located in London, the South-West and on the Bedfordshire and Buckinghamshire border. There are also meeting locations in many of the major cities and towns across the Home counties, South-West and South Wales, all conveniently placed so that you never have to travel far to meet your accountant.
If you have any questions about contracting or would like to find out more about how Integro Accounting can help you and business please call Christian on 01525 303984, email email@example.com or request a callback.