In the UK, the VAT number includes 9 digits and the prefix GB (block of 3, a block of 4, a block of 2 – e.g., GB999 9999 52).
The standard VAT rate in the UK is 20%, with a reduced rate of 5% on certain goods and services. Some things are exempt from VAT, such as postage stamps, financial and property transactions.
All businesses with a UK VAT number must submit periodic VAT reports and payments.
For all companies that operate in the UK, VAT returns must be submitted on a monthly, quarterly, or annual basis, depending on the accounting period chosen by the business entity.
For 1 or 3 months, an entity must submit the returns and pay the tax within 1 calendar month and 7 days after the accounting period ends.
According to the governmental website, HMRC (Her Majesty’s Revenue and Customs) can charge penalties for VAT non-compliance of up to:
Penalties for late payment of VAT are as follows:
Full VAT invoices issued in the UK must contain the following:
The Ministry of Defence and HMRC (Her Majesty’s Revenue and Customs) use eInvoicing extensively.
In general, electronic invoicing is permitted but not mandatory at this moment.
MTD is a compulsory system of online tax filing.
How to file the VAT return under MTD?
Who is affected by this obligation?
According to governmental web pages, VAT-registered businesses with a taxable turnover above the VAT threshold (£85,000) must follow the Making Tax Digital rules by keeping digital records and using software to submit their VAT returns.
Date updated [May 12, 2021]
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