Business Finance Glossary - V

VAT (Value Added Tax)

Tax applied to the majority of goods and services sold in the UK.

If your companies annual turnover exceeds £64,000 or you believe that your turnover in the next 30 days alone will exceed the registration threshold then you must register with HM Revenue & Customs for VAT. You can voluntarily register for VAT if you feel you pay a lot of VAT on purchases.

On international trade, VAT is payable on virtually all imports at the same rate of 17.5% as if the product or service had been supplied in the UK. Most exports are zero-rated for VAT.

Venture Capital

A means of financing the start-up, development, expansion or purchase of a company. A venture capitalist receives an agreed proportion of the company in return for providing the requested funding.