A value-added tax (VAT) is a form of consumption tax. From the perspective of the buyer, it is a tax on the purchase price. From that of the seller, it is a tax only on the value added to a product, material, or service.
• Must charge VAT on their goods or services
• May reclaim any VAT the have paid on business-related goods or services
If you are a VAT-registered business you must report to HM Revenue and Customs (HMRC) the amount of VAT you have charged and the amount of VAT you have paid. VAT return is usually due every 3 months.