• The United Kingdom government sets rules for the administration and collection of Value Added Taxhouses of parliament image by KEVIN DIXON from Fotolia.com
  
  In the United Kingdom, or U.K., Her Majesty's Customs and Revenue service (HMRC) is the government department responsible for administering and collecting Value Added Tax, or VAT. VAT is a tax applied to the sale of goods and services within the U.K., and is a requirement of the European Union (EU), of which the U.K. is a member. VAT laws require VAT-registered businesses to follow specific procedures for appointing agents to deal with VAT matters on their behalf, preparing VAT invoices and registering for VAT.
  
  

VAT Registration

• Companies, partnerships and individuals, including self-employed individuals, who are engaged in commercial business activity must register for VAT in the U.K., if they have a turnover, or sales, of more than £70,000 per year. VAT regulations even include clubs or associations as businesses, if they charge subscription fees or make other charges for providing membership benefits, such as access to club premises and use of facilities.
  
  A business may register for VAT voluntarily, even if it has a turnover of less than £70,000 per year. If your business has sales below the threshold, and you take over another business with sales below the threshold, you will have to register for VAT if the combined sales of your original business and the new business exceed £70,000.
  
  

VAT Agents

• VAT regulations allow businesses to make use of VAT agents to register for VAT, file VAT returns and communicate with HMRC in matters relating to VAT. VAT agents are typically accountants, bookkeepers, solicitors and specialist tax advisers.
  
  If you want to use a VAT agent to handle any of your VAT-related business, you are required to authorize the agent with HMRC, in writing, using the official form 64-8. VAT agents may file your returns online, but you must first activate an online account and then authorize your agent to file VAT returns, linked to your activated account.
  
  If you use the services of a VAT agent, you are still responsible for the accurate and timely filing of your tax returns, according to VAT regulations.
  
  

VAT Invoices

• When your business is registered for VAT, you can only claim back the VAT component of any purchases of goods and services used for your business if you have a valid VAT invoice from the supplier. VAT requirements mean that invoices must contain specific information in order to qualify as VAT invoices.
  
  If you are audited by HMRC, they require that all VAT invoices that have been included in the returns that they are auditing be available for inspection. The auditors will need to see that the invoices include the time and date of the transaction, the quantity of goods or details of the service provided, the total amount of the transaction--excluding VAT--the VAT rate, the amount of VAT added to the cost, and the VAT registration number of the business supplying the goods or services.