What is VAT?Value-Added Tax (VAT) is a consumption tax levied on the purchase of goods and services in the UK. It is an indirect tax, meaning that while businesses collect VAT from consumers, the actual tax burden falls on the end consumer. VAT is applied to a wide range of goods and services, including sales, the hire or loan of goods, commission, and even staff meals. VAT is not a tax on businesses; rather, it is a tax that businesses collect on behalf of the government. Once collected, busine