- VAT accounts for £1 in every £5 of UK tax revenue, making it the third-largest source of tax income.
- VAT is charged at a standard rate of 20% on most goods and services, with some items at reduced or zero rates, and some exempt.
- Businesses must register for VAT if their taxable turnover exceeds £90,000; some deliberately limit growth to avoid registration.
- The VAT system is complex, with multiple rates and exemptions, creating administrative burdens and barriers to business growth.
- There are calls for reform, including a single-rate VAT system, to simplify the tax and support economic growth.
Source: icaew.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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