The Happy Accountant

From Monday 1 December 2008, the VAT rate will drop to 15% and remain at this level until 31 December 2009, when it will revert back to 17.5%
The new VAT fraction is 3/23.

If a bad debt has been written off by a VAT registered business, the VAT on the original sale can be reclaimed.  The debt must be older than six months and less than three years and six months.
You include the VAT on the bad debt in input VAT (box 4) of your VAT return.

For the purposes of VAT, settlement discounts are treated as a finance charge.  Therefore, VAT is calculated on the net amount (after the settlement discount - regardless of whether the discount is actually taken).

Sage uses the following codes for VAT:

T1 - standard rate VAT
T2 - exempt (eg. stamps, insurance, aire fares, bank charges, financial services
T4 - EC Sales
T5 - lower rate VAT (eg. electricity, gas, women’s sanitary products)
T9 - not involving VAT/outside scope of VAT (eg. suppliers that are not registered for VAT, road fund licences ie. car [...]

There are some things that are completely outside the scope of VAT.  These include donations to charity, personal activies outside your business, MOT testing and tolls .
You do not charge or reclaim VAT on transactions that are outside the scope of VAT.

Generally, electricity and gas have a reduced VAT rate (5% at the time of writing).  Children’s car seats, giving up smoking aids and sanitary products also have a reduced VAT rate.

Some goods and services are zero rated for VAT.  These include books, newspapers, childrens clothing and children’s footwear.
Suppliers of zero-rated VAT goods/services can register for VAT and reclaim the VAT on purchases.

Some supplies are exempt from VAT, such as insurance, finance and education.  If you ONLY supply exempt goods/services, you will be exempt from VAT and will be unable to register for VAT.  This also means that you will be unable to reclaim any VAT from your purchases.
If part of your supplies are exempt, you will still be [...]

Retail Schemes
These, as you can imagine, are for use in connection with retail supplies.  Most VAT registered businesses take their output VAT from their sales invoices, but for retailers this is not practical due to the large number of sales made directly to the public.  The retail schemes provide a way for businesses to determine their [...]

You must register for VAT with HMRC.  This can be done using a paper form or online.  Once registered, you generally have to keep reocrds of:

the VAT you charge on your sales (output VAT)
the VAT you have paid on your purchases (input VAT)
the total amount of sales excluding VAT
the total amount of purchases excluding VAT

However, [...]