VAT is a tax that's charged on most goods and services that VAT-registered businesses provide in the UK and ;   •        Supplying goods or services within the UK.  •        Taking over a VAT-registered business from someone else. •        Receiving goods from other countries in the European Union •        Supplying goods or services from the UK to other countries. . •        Supplying goods or services to the UK from other countries   You have to register for VAT once the value of your taxable supplies in the previous 12 months has exceeds the registration threshold of £79,000 (including the value of supplies made by a VAT-registered business that you have taken over.   If you're carrying out one or more of the business activities described above but you haven't crossed the registration threshold, you can still apply to register for VAT voluntarily - it might be of benefit to you.   You can apply for exception from registration if; you can demonstrate to HMRC that in the longer term you will only be trading below the de-registration threshold of £77,000   There are three rates of VAT: •        standard - 20 per cent, reduced - 5 per cent, zero - 0 per cent There are also some goods and services that are: •        exempt from VAT and outside the UK VAT system altogether . penalty •        The penalty is worked out as a percentage of the VAT due, from the date when you should have registered, or became fully aware that you were required to be registered. The rate of penalty depends on how late you were in registering: If you registered Then the penalty rate will be not more than 9 months late          5% more than 9 months but not more than - 18 months late  10% more than 18 months late.   15% •        There is a minimum penalty of £50. Appeals If you disagree with either your liability to penalty or the amount of the penalty you have the statutory right to an independent review. You should request a review within 30 days of the date of our letter notifying you of the amount of the penalty.