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Knowing how much tax a limited company pays in the UK is essential for financial planning - particularly for entrepreneurs, contractors, and small business owners.
VAT (Value Added Tax) is the quiet backbone of the UK’s tax system. It is a consumption tax assessed on the value added of most goods and services sold in the UK.
When most business owners come across the term VAT registration, they tend to think that it is a mandatory exercise whereby once they pass the £90,000 in annual turnover, they automatically qualify under the VAT registration.
In the UK, several businesses prefer to hire a professional to handle their VAT returns in the UK because the importance of getting the process right cannot be overstated.
Any business registered for value-added tax (VAT) in the United Kingdom is assigned a VAT registration number. HMRC issues the unique VAT number, which is a critical part of conducting legal trading, filing returns, and receiving VAT refunds.