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Valuation: formal assessment of the worth of property, goods etc.

Value Added Tax (VAT): a tax charged on the supply of most goods and services. VAT is applied to all VAT registered businesses for a Net Sale or Purchase amount. VAT is a tax imposed by the government on certain goods/services supplied. For current information about VAT rates etc, see HM Revenue & Customs website. When a business is registered for VAT it is able to claim back VAT paid on goods/services.

Variable Costs: expenses which change in response to changes in the level of activity.

Variance: the difference between budget and actual. Can also be used to describe the difference between the opening and closing balance of an account.

Variance Analysis: a means of assessing the difference between a predetermined cost/income and the actual cost/income.

VAT Cash Accounting: a special arrangement for accounting for VAT that must be agreed with HM Revenue & Customs. VAT is charged on amounts actually received net of amounts paid, rather than on the invoices for those amounts.

VAT Invoice: an invoice issued by a supplier registered for VAT showing the supplier’s VAT registration number, the date of issue and the tax point.

VAT Outputs and Inputs: VAT charged on sales is referred to as Outputs and VAT incurred on purchases is referred to as Inputs.

VAT Receipt: a receipt showing the amount of VAT as a separate item, together with the supplier’s VAT registration number.

VAT Registration: all businesses registered for VAT are given a registration number. This number must be printed on all invoices.

VAT Return: all businesses registered for VAT are required to submit a statement each quarter to HM Revenue & Customs to account for VAT Outputs and Inputs. The VAT Return is a declaration which determines the liability to pay VAT, or receive a refund.

VAT Tax Point: the date on which VAT eligible sales are completed.