GLOSSARY

Unwanted Companies

If you do not need a limited company any more, you should consider putting it into voluntary liquidation. If there are insufficient funds to warrant this, you may be able to apply for the company to be struck off the register.

Variable Costs

Also known as direct costs, cost of sale. These are the costs that are directly incurred when you sell your product, or service, for instance stock in a retail shop, plumbing materials for a plumber, bricks, sand and cement for a builder. They also include materials purchased for resale, raw material, work in progress and sub-contracted labour used to produce the items for sale. These costs are deducted from your sales figure to arrive at a gross profit.

VAT

Value Added Tax is a sales tax set at 17.5% of value within the UK. Most goods and services supplied within the UK are liable to VAT.

Companies must charge VAT when supplying within the UK. A company that is VAT registered may reclaim VAT on purchases.

There is no VAT on exports beyond the UK.

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