You need to know the right VAT rate so you can charge it correctly and reclaim it on your purchases.
If a transaction is a standard, reduced or zero-rated taxable supply, you must:
- charge the right rate of VAT
- work out the VAT if a single price is shown that includes or excludes VAT
- show the VAT information on your invoice
- show the transaction in your VAT account – a summary of your VAT
- show the amount on your VAT Return
You may be able to reclaim the VAT on purchases that relate to these sales.
You can’t claim back all of the amount you’ve paid if you pay the wrong amount of VAT on a purchase.