When completing your bookkeeping as a VAT-registered business, it is important to have a good understanding of the different VAT rates that apply to the different transactions. This help sheet explains what typical transactions would require the VAT rates specified. If you are ever unsure about how to assign a transaction, please always consult your dedicated client manager who can assist further
20% VAT
- Goods and services from a VAT registered company that does not sell exempt products/services. Most goods and services charge VAT.
- Travel and Subsistence – Accommodation and food & drinks ONLY
- Motor expenses (if company car only) – Fuel, repairs & maintenance, accessories
- Accountancy & Professional Fees
- Software (the UK only)
Exempt VAT
- Insurance and finance
- Education and training
- Bank Charges
- Professional subscriptions
- Postage
- Gambling
Zero-rated VAT
- Books
- Most food * – This is mostly applicable to a café/restaurant. Products such as alcohol incur VAT. Therefore you may have to split the VAT when allocating the VAT in the bookkeeping if there is more than one item on the receipt.
Reduced VAT – 0% and 5%
- Energy-saving items- e.g., energy-saving light bulbs, air source heat pumps wood-fuelled boilers, solar panels, and insulation.
- Mobility Aids
- Electricity for domestic use
What else can’t I reclaim VAT on
- You can’t reclaim VAT on private use purchases
- Business entertainment costs
- Imported goods from other EU countries
Can I reclaim VAT on purchases made before registration
You can also reclaim VAT paid before you became VAT registered. The time limit is 4 years for goods you still have, or that were used to make other goods you still have, and 6 months for services.
Get value from your Value Added Tax.
SAS Micro takes pride in getting as much value as possible from your Value Added Tax (or VAT for short). Our services include helping you register for VAT, assisting with preparing your VAT returns and reviewing your current financial situation.
For more advice get in touch with a member of SAS Micro!
