What is the huge difference between Sales and Used Tax and VAT? Is there Nexis within VAT?

Question posted by Tiffany Pevey, on behalf of WBC in

What is the huge difference between Sales and Used Tax and VAT? Is there Nexis within VAT?

This question was asked during our VAT Fundamentals webinar. You can watch the webinar at http://opentoexport.com/info/webinars/#VAT_fundamentals

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Liz Maher, on behalf of Centurion VAT Specialists Ltd in NP18.

VAT is a tax on each transaction is effectively collect tax revenue on the profit margin that each business adds to their supply. VAT is charged and then should be recovered by businesses as the supply moves through the chain. Ultimately VAT recovery stops when we as not VAT registered consumers buy the supply or it is bought by a business or body that cannot recover it as they are using it in making Exempt or non business supplies. Its what is called an indirect tax and now operates in around 115 across the globe as its so effective as a tax generator.

a sales tax is a tax on the sale and is not recovered.

Regards, Liz www.centurionvat.com

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HMRC Advisor, on behalf of HM Revenue & Customs in G67.

If you are asking if there is a connection between VAT and sales and used tax, I am unsure what you mean by used tax. I can clarify however that VAT is a tax on consumer expenditure. It is collected on business transactions, imports and acquisitions. Most business transactions involve supplies of goods or services. VAT is payable if they are:

•supplies made in the UK or the Isle of Man

•by a taxable person

•in the course or furtherance of business

•are not specifically exempted or zero rated

Supplies which are made in the UK or the Isle of Man and which are not exempt are called taxable supplies.

VAT Notice 700 – The VAT Guide is the main reference guide to VAT and it explains all the main VAT rules and procedures. . https://www.gov.uk/government/publications/vat-notice-700-the-vat-guide

If you cannot find the answer to your query in this publication, you can contact the VAT: general enquiries helpline: https://www.gov.uk/government/organisations/hm-revenue-customs/contact/vat-enquiries

HM Revenue & Customs

Customs International Trade & Excise


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