VAT is also called Value Added Tax. It is included in goods and services that are sold and bought and different services in the UK. It can be stated as a ” consumption tax”. It is due to the reason that it is charged on items that people buy. Therefore, it is also called ” indirect tax” since this Tax is collected by business for the Government.

VAT, or Value Added Tax, is levied on the sale of goods and services in the UK. It is a type of ‘consumption tax’ because it is charged on items that people buy and is also an ‘indirect tax’ because it is collected by businesses on behalf of the Government.


Sometimes people ask questions like: “what is VAT and why do we need it?” Such things are useful and important to know as every inhabitant of the UK is connected with VAT. Either you are an average customer or a businessman; you have to know as much as it’s possible about VAT.
So what is VAT? VAT is a kind of tax, added to every price of almost every item you buy. If you see a price and there is a note: “including vat”, then you definitely know that the portion of this price is VAT.
When you don’t know what is VAT and how big its portion in the price is you use VAT calculator. There are two ways to calculate VAT with the help of VAT calculator. The first way is to exclude VAT from the gross amount. This way you’ll be able to calculate VAT and net amount. The second way is opposite: you enter your net amount and calculate VAT and gross amount with the help of VAT calculator.
All the goods and services of the country are divided into two groups. The first group includes VAT-rated items and the second group includes VAT-exempt services. Here are some services, which belong to the second group: rent, private education, health services, postal services, finance and insurance, and gambling.