Thursday 3 January 2013

VAT, a European Invention

Europe has given us many things over the years; the metric system, Cornish pasty naming restrictions and more recently ash dieback, but did you know that VAT also originates from the Continent?

Value Added Tax

It was first envisioned in the 18th Century by a German economist looking for a sales tax on goods that did not affect the cost of manufacture or distribution.

Quite some time after it was devised, the system was adopted by France in 1954. A few years later, when the Common Market (now the European Union) was formed, it was decided that the imposition of a form of VAT would be a requirement for joining.

Hence, when the UK joined the EEC in 1973, we replaced our existing Sales Tax with VAT.

Dreaded VAT Returns

Many companies have an understandable love / hate relationship with VAT, but despite the dread of regular VAT returns, being VAT registered can bring many benefits and a good accountant is invaluable in realising those benefits.

If your business is close to the threshold, give me a call to discuss VAT registration.

More Information

If I've whet your appetite for VAT facts, try the following resources:

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