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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 your clients then accurate vat calculation can help you calculate exact vat rates. Calculating vat rates is very easy and you will need to display all your calculations within 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 Year http://vatnumbersearch.com. This would lead to issuance of vat invoices by you to all your future clients. Your vat invoice will have to mention your vat number along with vat rates alongside your services or goods which you have sold to the clients. To be able to calculate vat you need to know the classification of the products or services as decided by HM Revenue and Customs or hmrc vat department that manages all aspects of vat in the UK.

There are actually 14,000 vat classifications given by hmrc just in case you have trouble in slotting your products or services within the right classification you then should appoint a professional vat agent with complete knowledge on uk vat rules and even eu vat rules in the event 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’s another lower rate of 5% that is also applicable on certain children?s goods as well as other services and also a zero vat rate on specific services and goods additional info. 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, if you sell an item at ?100 to a client that attracts vat at 17.5% in that case your vat calculations will have to display the vat rate, i.e. ?17.50 following the product rate and also the total quantity of the sale including vat, i.e. ?117.50, the final value of your vat invoice. These amounts must also be calculated and summed up within your vat returns. Similarly any vat already paid on services or goods imported by you to the UK can be claimed back through a vat reclaim form that also needs to calculate the vat amount paid. It is possible to install a vat accounting software package on your desktop so as to accurately calculate vat on each vat invoice since mistakes won’t be looked at kindly by the hmrc vat department.

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

Accurate calculation of vat is very important while selling or buying items that are governed by vat tax. These amounts will need to be reflected within your purchases, sales, vat returns, and vat refunds too. Your enterprise will operate correctly while hmrc will also remain happy with you only once your vat calculation is accurate and clear in your vat documents and books.