26/08/2021 - CruseBurke

How Much is VAT in the UK?

George26/08/2021Tax Issues , VAT

After Brexit, the UK VAT system experienced significant updates, especially from 2021 onwards. Though the major reforms have settled, it’s still essential to understand how much VAT you must pay in 2025, what VAT rules apply, and how it affects your business or purchases. Need professional advice from a VAT accountant? Get in touch with our experts today! How Much is VAT? Let’s see how much VAT you need to pay in the UK in 2025-26. Three different VAT rates are charged on various types of goods and services in the UK. Standard Rate (20%) Currently, the standard VAT rate of 20% is levied on most goods and services. This rate is also applicable to those goods that are below the standard distance selling EU VAT threshold sent from Northern Ireland to a non-VAT registered EU client. Reduced Rate (5%) A reduced rate VAT is 5%. Some of the goods and services are charged at a reduced rate, like: Home energy Children’s car seats Mobility aids for seniors Zero Rate (0%) As evident by the name, it means that it is charged at a 0% rate. It means that your customers will pay you 0% in VAT. However, still, you need to record and report it in your VAT returns. Some of the common examples of zero-rated goods are: Basic food items Books & newspapers Children’s clothing Most goods sent from Great Britain to countries outside the UK Most goods sent from Northern Ireland to countries outside the UK and EU Along with these rates, there are some goods and services on which you don’t need to pay VAT means they are exempt from VAT. Postage stamps, financial and property transactions are common examples of it. However, you don’t need to include it in your taxable turnover. You need to bear in mind that the VAT rates keep on changing, so you must be up to date with the VAT changes. Want to register for VAT? Today Register For Vat without any hassle, at CruseBurke. VAT Reforms Post-Brexit (Still Applicable in 2025) Though no major VAT reforms have been introduced recently, the post-Brexit VAT changes from 2021 remain in effect: The £15 VAT exemption for imported low-value goods is no longer valid. Sales under £135 to UK customers from overseas are now taxed at the point of sale, not at customs. Online marketplaces (like Amazon and eBay) are responsible for collecting VAT on behalf of overseas sellers for goods sold to UK customers under £135. These changes aimed to simplify VAT collection on imports and reduce fraud, while also leveling the playing field for UK businesses. Do You Need to Charge VAT on Exports to the EU? If you’re selling goods to EU customers and you’re a VAT registered business, the good news is that you can sell your goods at a zero rate. From 2025 onwards, the goods you send to EU member states will be treated equally as the goods that come from a non-EU country. However, import taxes are payable on them. As goods, services of the UK supplier will be considered same as the supplier outside the EU. Summing Up To sum up, you have understood the VAT changes and reforms that have recently been made. In addition, to find out the answer to ‘ how much is VAT payable in the UK’ you need to look at various factors like the business platform, size, nature and the location of your customers, etc. VAT can be a complex area for many, therefore it’s better to get in touch with a tax expert for help. So, look no further other than CruseBurke! Contact our qualified VAT accountants and sort out your issues! Get an instant quote right away! Disclaimer: This blog post provides general information on VAT.

Joint Property Ownership Tax Saving Tips – Basic Guide

George26/08/2021Tax Saving Tips

The property that two or more parties claim is known as Joint Property Ownership. In joint property ownership, each proprietor has equal rights to the total of the property. On the off chance that one of the proprietors passes on, part possessed by the expired proprietor consequently passes to the surviving proprietor. For joint ownership property tax, each proprietor has an equal share of the property and revenue. For instance, a property is worth £100,000, and annual rental income is £10,000 possessed under joint ownership property. Then on each owner, £5,000 income will be taxed. In addition to that, each owner will pay the CGT (Capital Gains Tax) on half of the property when it is sold. This is often the case for both companions and other joint proprietors. Read this blog till the end to know more about joint property ownership tax. Ask our Accountants about the best tax-saving tips for your property! Default 50:50 Split can be Change The default split of joint property ownership is 50:50 for spouses and civil partners, and it can only be changed by election. You are required to fill Form 17 and submit it to HM Resource & Customs to make an election. As per HM Resource & Customs, you can utilise Form 17 to proclaim advantageous proprietorship in the event that you meet all the conditions below: You are life partner or civil partner and possess joint property in unequal shares You are authorized to the revenue emerging within the portion of those shares and you want to be taxed on that basis As per HM Resource & Customs, you can’t proclaim unequal shares just for tax advantage. The Statement in Form 17 needs to reflect the authentic beneficial proprietorship. Because HM Resource & Customs want to see the evidence of the proprietorship, which is often a legal document, for instance, the election will not be valid if you proclaimed income split 20:80 between you and your spouse in Form 17, but, in reality, you’re the 100% owner of the property. You can Download Form 17 here. How many Times can I make Changings in Election Form 17? On the off chance that there’s a change in beneficial ownership, then you’ll be able to change the % part as many times as you like utilising Form 17. There’s no constraint. Form 17 is required to be supported by a change in beneficial proprietorship every time you change the income split. Make Changings in Election Form 17 with the help of our Accountants! Unmarried Couples – Joint Ownership Property Tax The income is not generally split as 50:50 for unmarried couples. So, they can share their revenue among them as they like. However, joint ownership property tax should follow the same way the income is shared. For instance, John and Edward together possess the property and share the rental wage within the extent of 80:20. In this case, it will be valid for unmarried couples even though the beneficial proprietorship is 50:50. Therefore, for other joint owners, Form 17 is negligible. Save CGT by Transferring Beneficial Ownership before Sale Beneficial proprietorship of the property can be transferred to others as many times as you like. Therefore, there is a strategy to save Capital Gain tax by transferring the share of the property to your partner before the sale. But, of course, the transfer before the sale will not be valid if the transferee is not beneficially entitled. Another point to remember is that, before agreeing to the sale of the property, transferring should be done as it is the safest way to transfer. Final Thoughts To sum up, we will say that each accomplice (partners) should clearly understand that joint property ownership tax needs specialists and proficient accountants to provide directions and services for managing tax. Even though, this may be challenging to persuade the other partner to work for an unequal split as they may see it as a hazard or trap to earn more. To agree and work together, at one point, you may need the help and services of a chartered accountant at affordable prices. Contact our professionals for instant Tax Management!