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What is VAT?

VAT – also known as Value Added Tax – is an additional charge made on the sales of goods and services. It’s only made by VAT registered companies within the UK. The current VAT rate is 20%. By becoming VAT registered, in a way, you become a form of mini tax collector for the HMRC as you’re collecting the funds on behalf of them. By doing so, you’re also entitled to claim back the VAT you’ve been charged when buying products and services, which is where it can become very useful for a growing business.

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