Value Added Tax - VAT
VAT is everywhere, a tax that you might not realise you are paying as it is usually automatically added on to the price that you pay and not split off.
The majority of goods have to have VAT added, though there are some that don't.
Within the EU each country has a rate of VAT and these may vary; within Britain there are three different rates of VAT as follows.
The standard rate which is added on most goods at 17.5 per cent.
The reduced rate is at 5% for some items such as childrens car seats.
Zero rate are goods that don't have fat, such as staple foods, papers, magazines, children's clothes and some other exempt items.
When it comes to businesses, those with annual sales below £64,000 don't need to register for VAT (so therefore don't need to add it on), although it is voluntary. Above that level then they will have to register for VAT.