HM Revenue & Customs (HMRC) is responsible for ensuring that VAT-registered traders comply with the legislation relating to VAT and meet their responsibilities with regard to accounting for and paying the tax due.

The legislation covering VAT is complex and it is important to seek professional advice or contact HMRC for guidance to ensure compliance with current law.

This factsheet introduces the basic principles of VAT. It explains what VAT is, the principles of VAT for traders, what the VAT registration thresholds are, and when registration is required. It also summarises the different rates of VAT and the situations in which sales are exempt from VAT.