What does VAT stand for?

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Multiple Choice

What does VAT stand for?

Value Added Tax is a type of tax applied to most goods and services. The idea behind "value added" is that the tax is charged on the value a business adds as a product or service moves through production and distribution. So, at each stage, VAT is collected on the sale, and businesses can reclaim the VAT they’ve paid on their own purchases, meaning the cost ultimately falls on the final consumer. This is different from a tariff (a duty on imports) or a toll (a fee for using a road), and it isn’t simply a total. In the UK, VAT is administered by HM Revenue & Customs and appears in the price you pay for many goods and services.

Value Added Tax is a type of tax applied to most goods and services. The idea behind "value added" is that the tax is charged on the value a business adds as a product or service moves through production and distribution. So, at each stage, VAT is collected on the sale, and businesses can reclaim the VAT they’ve paid on their own purchases, meaning the cost ultimately falls on the final consumer. This is different from a tariff (a duty on imports) or a toll (a fee for using a road), and it isn’t simply a total. In the UK, VAT is administered by HM Revenue & Customs and appears in the price you pay for many goods and services.

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