I'm registering for VAT, and I deeply resent paperwork. So, riddle me this... Let's say I have a supplier, and I buy goods from it. I process the goods in some way to increase their value, and sell the processed goods on to my client. The client then turns around and sells them to the general public. All three companies are VAT registered. I buy a widget from my supplier for £10. My supplier charges me £12, the £10 widget cost plus £2 VAT. At the end of the quarter, my supplier sends that £2 to HMRC. I sell the widget on to my client for £100. My client pays me £120, the £100 widget cost plus £20 VAT. At the end of the quarter, I send that £20 to HMRC. My client sells the widget on to an end-user for £200. The end-user pays £240, the £200 widget cost plus £40 VAT. At the end of the quarter, it sends that £40 to HMRC. That's three payments to HMRC; HMRC now has £62 in VAT payments. However, remember when I said everyone involved except the general-public end-user is VAT registered? That means we can claim the VAT payments we made back. So, I claim back the £2 I had to pay to the supplier; my client claims back the £20 it had to pay to me. That's three payments to HMRC, and two payments from HMRC; HMRC now has £40 in VAT payments. So... why, for the love of the deity of your choice, do we do that? Four of those are completely unnecessary payments. Let's envision a world where VAT transactions make sense: if you're VAT registered, and you're transacting with another VAT registered entity, the VAT is simply zero-rated. Let's go through that process again: I buy a widget from my supplier for £10. My supplier charges me £10, pays HMRC nothing. I sell the widget on to my client for £100. My client pays me £100, I pay HMRC nothing. My client sells the widget on to an end-user for £200. The end-user pays £240, the £200 widget cost plus £40 VAT. At the end of the quarter, it sends that £40 to HMRC. That's one single payment to HMRC, no payments from HMRC. Yet, somehow, as if by magic, HMRC still has the same £40 as with the way the system works currently. The only difference is, we saved four annoying and unnecessary bank transfers and a heck of a lot of paperwork and admin. Here endeth the rant.