VAT is a form of tax on consumer expenditure. It is collected on business transactions, imports and acquisitions. Most business transactions involve supplies of goods or services. VAT is payable if they are:
- Supplies made in the United Kingdom or the Isle of Man
- By a taxable person
- In the course of a business
- Are not specifically exempted or zero-rated.
Once a company's annual sales revenue reaches the 82,000 pounds threshold (current threshold), it is required to register with HM Customs and Excise for Value Added Tax (VAT). The HMRC requirement is for a company to register for VAT if it expects the total sales revenue for the year to equal or go beyond the threshold amount.