The VAT is a value-added tax levied on every stage of the supply chain. It is a consumption tax from the production of goods to the distribution of these goods to the end consumers. Value-added tax is imposed on the cost of the product. The user pays this tax only on the cost price of the product except for those materials which are already been taxed and used in production. 160 countries around the world use value-added tax and it is very commonly used in the European Union. For the business community, this tax is regressive. They are of the view that this tax imposes bureaucratic burdens on the corporations. It creates an economic barrier for the low-income producers but its supporters say that it is far better than the income tax and sales tax as it gives direct revenue to the government without directly contacting the public wealth. Among all the fat industrial states of the world, the US is the one who does not levy this tax. How VAT operates
As it is already mentioned that VAT is charged on each stage of the supply chain. The supply chain is a process of conversion. It transforms raw material into the finished goods and then distribution them in the market. It involves all the stages, a product passes through, from its production to the distribution to the end consumer. Value-added tax levied on the gross margin of all these steps. The VAT in the UK You submit your VAT return in the UK to the HMRC every three months. You have to submit your VAT return in the UK even if you don’t have any tax to pay or retrieve. This circle of three months is known as the accounting period. VAT records the things based on the following considerations:
You submit your return online except; If your industry is going through or foreseeing any kind of bankruptcy, But if you have any CVA (Company Voluntary Arrangement) you can submit it online. If you do not qualify due to your age, any disability or area of your residence with no internet access. Submission of Return For the submission of VAT return, you need an online account and a VAT number. By signing in you can simply file your return by using HMRC online service portal. For the acquisition of a VAT number and an online account, you need to register for it first. Filling a VAT return is just two steps away from you
Accounting Software For the calculation of tax, there are many accounting software that helps you in submitting your return directly. You do not need any separate VAT calculator for this. There is a list of software on the webpage of HMRC. UK VAT return system is very convenient and simple. Its easy procedure makes the collection of taxes easy and transparent. If you feel any difficulty in filing your return online you can also authorize an agent on your behalf by using your online account.
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