[VAT](/our-services/vat-returns) is tax added to goods and services. A VAT registered business must charge VAT on their sales, this is known as output VAT. A VAT registered business can then recover input VAT on their purchases. Once the VAT period end has passed, a VAT return must be submitted to HMRC which calculates the balance of VAT payable to or repayable from HMRC. A business that is not VAT registered does not charge VAT on their sales and cannot recover VAT on purchases.