What is VAT?
Value Added Tax (VAT) is a tax businesses charge when they supply their goods and services in the United Kingdom or Isle of Man.
It is also charged on goods, and some services, that are imported from places outside the European Community (EC) and on goods and services coming into the UK from another EC Member State.
The following are examples of business supplies:
• selling new and used goods, including hire purchase;
• providing a service, for example, hairdressing and decorating;
• charging an admission price to go into buildings;
• self-employed people providing supplies, e.g some salesmen and subcontractors.