When it comes to taxes, the term “VAT thereon” may sound confusing. But understanding what it means is essential for any business that deals with goods or services that are subject to Value Added Tax (VAT).
VAT is a type of consumption tax that is applied to goods and services at each stage of the production and distribution process. It is collected by the seller from the buyer and then passed on to the government.
The phrase “VAT thereon” simply refers to the amount of VAT that is due on a particular item or service. It is usually expressed as a percentage of the total cost of the item or service. For example, if a product has a price of £100 and the VAT rate is 20%, then the VAT thereon would be £20.
In some cases, the amount of VAT due may be different depending on the type of product or service. For example, some items may be exempt from VAT, while others may be subject to a reduced rate. In these cases, the amount of VAT due will be specified separately.
VAT thereon is an important term to understand when it comes to taxes. It is important for businesses to understand the amount of VAT due on their products and services in order to ensure that they are correctly calculating and remitting the correct amount of tax.