VAT (Value Added Tax) is charged on most goods or services sold or provided by a VAT-registered business in the UK. It is charged whenever a VAT-registered business makes a sale to another business or to a final consumer.
If your business trades in goods or services that qualify as “taxable supplies” and your turnover exceeds the £85,000 VAT threshold, you are required to register for VAT. You may, by choice, register for VAT even if your turnover is well within the threshold and unlikely to exceed it any time soon.
If your business is VAT-registered, as well as charging VAT on the goods and services that you sell, you may reclaim the VAT you have paid in buying goods or services from other businesses.