Value Added Tax is a simple enough system that was introduced in 1973. It was brought in when the UK joined the EEC, which was to become the EU. However, there seems to be little scope for it being removed now that we are out of Europe. The idea behind VAT is that every purchase of goods or services is taxed. At the moment, this is set at twenty per cent, but it can be lowered or raised if the Government see fit. In the past, it has been set at 15 per cent, but it has risen over the years. If a sector is in trouble, the Government can help by reducing the VAT on a specific section of industry and retail. For example, during the ongoing COVID19 crisis, Tourism and Hospitality venues saw a temporary drop.
Some products like Alcohol and Cigarettes see their TAX threshold regular increase and rarely decrease. This is why suppliers use the services of a Bonded Warehouse. By using Bonded Warehouse Management Software, they can control when the products are put out to the market. This is why they need Gaina Bonded Warehouse Management Software to control the flow of the products. A quick-release may make them susceptible to extra tax and duty.
Some products are exempt from VAT. The most notable exceptions are Cake and Caviar and more practical everyday items like Disposable Nappies and Children’s clothes.