Charge to Tax- VAT
VAT is collected on supply of goods or services if there is charge to VAT, i.e., levy of VAT. In simple words, whenever there is a supply of goods or services by any taxable person, then such supply will create a levy/charge to VAT
How VAT works
VAT is an Indirect tax in nature, where tax is paid indirectly to government. For example, unlike Income tax which we pay directly to tax authorities, VAT is collected by registered person from purchaser and then it is paid to authorities
Scope of VAT in UK
VAT is an indirect tax payable whenever there is a supply of goods or services and is payable by recipient of such goods or services. Therefore, it is very important to understand the scope of VAT.
Scope of VAT is defined under Section 4 of the VAT Act, 1994 as follows:
“”4(1) VAT shall be charged on any supply of goods or services made in the United Kingdom, where it is a taxable supply made by a taxable person in the course or furtherance of any business carried on by him.
(2) A taxable supply is a supply of goods or services made in the United Kingdom other than an exempt supply.””
Y4 Express Limited v HMRC [2022]
In Y4 Express Limited v HMRC [2022], the tribunal gives its pronouncement that appellant company (Y4), would not able to recover input VAT paid on printing postage Impressions (PPI) at preferential rate.
Northern Ireland Protocol
Northern Ireland Protocol primarily concerns to avoid hard borders between Northern Ireland and rest of the Ireland and furthermore, as EU make sure to sustain single market concept in case of supply of goods.