insurance vatable
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Taking stock of your current life insurance policy should be a regular event, but the reality is you probably haven’t given it much thought beyond making your premium payments. If that is the case right now is a great time to evaluate your life insurance coverage for a number of reasons. Economic conditions have put large life insurance providers in the news so it’s a good idea to check into how much protection your life insurance policy has against industry trends, and the life insurance market has fundamentally changed over the last several years.
Life insurance trends
Let’s take a look at that last trend; that the life insurance industry has fundamentally changed over the last several years. If you’ve had your current life insurance policy for five years or longer most likely you can find a much better deal right now. Because life expectancy is rising life insurance – particularly term life insurance – rates are dropping. A good way to take advantage of this trend in term life insurance and still retain access to whole life insurance is to purchase term life insurance with a convertibility feature to eventually turn your life insurance policy into whole life insurance.
Economic conditions and life insurance
Looking at current economic conditions brings two factors into consideration. The first is you want your life insurance provider to remain in business, and if for some reason your life insurance provider can no longer honor your policy you want to ensure you are protected against any loss. To keep tabs on the financial health of your life insurance provider check with all the ratings services such as Standard and Poor’s and A.M. Best on a regular basis. Maybe even weekly. If your life insurance provider’s rating is dropping do take the time to look into the ramifications, financial and otherwise, of leaving your current life insurance provider for a new company.
Is my policy protected?
That becomes a major question when your life insurance provider can no longer honor the policy because of financial problems. The good news is life insurance policies have quite a bit of protection, not unlike bank deposits. If a life insurance company goes under, policy holders get paid before shareholders in the company. Life insurance policies are also backed up by state insurance guarantee associations. It is good idea to find out the limit your state will pay in the event your life insurance provider suffers financial collapse.
Becoming VAT registered?
It is compulsory for your business to register for VAT if your taxable supplies, distance sales, or acquisitions are expected to exceed the VAT registration threshold in the next 30 days, or if you are already trading, and they have exceeded the threshold in the past 12 months. The current VAT registration threshold for 2009/10 is £68,000.(from May 1st 2009). A free online knowledge database is available to find out the most up-to-date details.
Note: “Taxable Supplies” are any goods and services that are subject to VAT at any rate, including zero rate
VAT errors and omissons
If you have made errors on a previous VAT return you can correct these on the next return you submit. From 1 July 2008 the error limit has been increased from £2,000 to the greater of £10,000 or 1 per cent of turnover, subject to an upper limit of £50,000. The 1 per cent is based on box 6 of the VAT return in which the error was found
If the error is greater then you will need to inform your local VAT office immediately or contact your accountant.
What are the VAT rates?
NOTE: The standard rate of VAT was reduced from 17.5% to 15% by the chancellor Alistair Darling on 1st December 2008. The standard rate is set to change again on 1st Jan 2010.
Zero-rated supplies
Below are examples of taxable supplies where the VAT rate of 0% is applied.
- Most food, but not HOT food prepared in restaurants, take-aways, or any other food outlets. The only exception to this rule is if the food is heated but not with the intention to be consumed hot. Eg, Bread from a baker will often be sold hot or warm. Also pasties fall under this exemption.
- books;
- newspapers;
- young children’s clothing and shoes;
- exported goods (For further information see Notice 703 Exports and removals of goods from the UK.);
- most prescriptions dispensed to a patient by a registered pharmacist;
- and most public transport services.
VAT is not charged (therefore it cannot be reclaimed) on goods and services that are:
- exempt from VAT
- outside the scope of VAT
Exempt items
There are some goods and services that are exempt from VAT. Exempt goods and services are not taxable for VAT. Items exempt from VAT include insurance, some services from doctors and dentists and some types of education and training. If you sell or otherwise supply exempt items, you cannot register for VAT and you cannot charge VAT. If you buy exempt items, you cannot reclaim any VAT. If you sell some exempt items and some VATable items, your business is ‘partly exempt’ and you will only be able to reclaim VAT related to the VATable items you sell.
There’s an important difference between goods and services that are exempt from VAT and those that are zero-rated. If you sell or otherwise supply zero-rated items, you can claim the VAT back on your purchases.
Items outside the scope of VAT
Some goods and services aren’t covered by the UK VAT system at all – they’re outside the scope of VAT. You don’t charge nor reclaim VAT on goods or services that are outside the scope of VAT including any items that you:
- sell or otherwise supply when you’re not registered for VAT – and you don’t need to be registered
- buy and sell outside the UK
- don’t sell or otherwise supply as part of your business
- buy and sell for your own personal use such as a hobby
Other items outside the scope of VAT include:
- Donations to charity freely given by a business where the giver does not receive anything in return
- Statutory fees and services, eg MOT testing, congestion charge
- Tolls for bridges, tunnels and roads operated by public authorities
- Low cost welfare services provided by charities
Goods or services you supply within the European Union (EU) can be inside or outside the scope of UK VAT, depending on the particular transaction.
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Article Source: ArticlesBase.com – Becoming VAT Registered