There comes a point in every artists life when they need to consider VAT and VAT payments towards HMRC. You can check out the threshold on the HMRC website at their VAT rates page for more information.
So what does this mean for artists that provide VAT taxable goods once they go over the VAT threshold? Well this means that you have to register for VAT and start charging VAT on all your VAT taxable goods or services you produce. You can check out the list of VAT taxable goods on the HMRC VAT Taxable Goods page. This basically means that you add the current rate of VAT to our invoices and collect this 20% on behalf of HMRC. Every quarter you pay this VAT to HMRC online by doing a VAT tax return on the HMRC website. It’s a clever way of the government getting tax as you charge VAT on your products and services, then deduct the VAT you claim back (what items you get charged VAT for – supplies etc) and then give them the difference.
You can do this by using your calculator or you can find a vat tax calculator website such as this one to help you out. Just double check your threshold rate each quarter and you should be fine. Your accountant will probably raise a flag when you come near it. With VAT comes Stamp Duty when buying land or a property so we’re also here to show you a quick Stamp Duty Calculator that you’re welcome to use when buying a property or land.
Hope this helps!