• Taxation in the UK
• Tax advantages
• Who pays tax?
• I live outside the UK
• Fuel tax
• Value Added Tax
• Corporate tax
• Income tax
• National insurance tax
• Capital gains tax

If you buy a good or purchase a service in the United Kingdom you also pay a value added tax, which is included in the price. Most of the cases the abbreviation of VAT is used and its rate must be stated on that certain good.

This type of tax is basically a tax on the exchanges of goods or services, excluding some goods exported, and also one of the most important sources for the state’s public treasury.

Value added tax was invented in 1954 by a French economist and was first implied for large businesses. After the sucessful introduction in France many states took over this new way of indirect taxation and using it effectively since. In most of these countries value added tax covers almost the half of the state’s income.

However, businesses have to opportunity to recover VAT on the the services and goods they purchase with the aim of making a good or services which later will be sold the the end-consumer.
The current rate of VAT in the UK is 17,5%, but some goods and services have a lower rate of 5% VAT included in their price, and some are fully tax exempt.