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Accurate vat calculation will help you calculate exact vat rates


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When you start issuing vat invoices to the clients then accurate vat calculation will help you calculate exact vat rates. Calculating vat rates is quite simple and you will need to display all your calculations in your vat invoices and your vat returns too.

If you are based in the UK then you would have turned into a VAT registered trader once your taxable sales might have reached the vat threshold figure of 70,000 pounds within the past 12 months www.vatnumbersearch.com. This would result in issuance of vat invoices by you to all your future clients. Your vat invoice would need to mention your vat number along with vat rates alongside your goods or services that you have sold to the clients. To be able to calculate vat you need to know the classification of the goods and services as decided by HM Revenue and Customs or hmrc vat department that manages all aspects of vat in the United Kingdom.

There are actually 14,000 vat classifications provided by hmrc and if you’ve trouble in slotting your goods and services within the right classification then you certainly should appoint a professional vat agent with complete knowledge on uk vat rules as well as eu vat rules if you import goods from any eu country. In the United Kingdom vat is spread into three slabs, namely the regular rate of 17.5% which will soon increase to 20% from January 4, 2011. There is another lower rate of 5% which is also applicable on certain children?s goods as well as other services and also a zero vat rate on specific goods and services yoururl.com. Thus, in case a certain product is taxed at 17.5% then your calculations will have to be based on that vat rate only.

For example, let’s say you sell a product at ?100 to your client that attracts vat at 17.5% then your vat calculations will have to display the vat rate, i.e. ?17.50 after the product rate as well as the total amount of the sale including vat, i.e. ?117.50, the final value of your vat invoice. These amounts will also need to be calculated and summed up in your vat returns. Similarly any vat already paid on services or goods imported by you to the UK can be claimed back via a vat reclaim form which also needs to calculate the vat amount paid. You can easily put in a vat accounting software program on your computer in order to accurately calculate vat on each vat invoice since mistakes will not be viewed kindly by the hmrc vat department.

Your vat returns will likely need calculations of various vat amounts paid and calculated. These calculations may also differ on the vat scheme that you opt for since the flat rate scheme will call for different calculations when compared to the other schemes. You will additionally need to learn on how to calculate vat amounts from vat exclusive and vat inclusive prices to get the precise amount of vat.

Accurate calculation of vat is very important while buying or selling goods that are subject to vat tax. These amounts will need to be reflected in your purchases, sales, vat returns, and vat refunds too. Your enterprise will run smoothly while hmrc will also remain pleased with you when your vat calculation is accurate and clear in your vat documents and books.