Value Added Tax

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Tax - indirect tax.

(VAT).

A tax added to the price of many goods and services in many jurisdictions.


VAT-registered businesses pay a net amount tax based on the value that they add to the goods and services.

  • They account to the revenue authorities for the Output tax they have collected from their customers.
  • But they deduct / reclaim the Input tax they have paid to their suppliers.


Relevant UK accounting standards include Section 29 and Section 23 of FRS 102.


See also