What is the VAT status of payments to Companies House?

Accounting for Value Added Tax and filing VAT returns can often prove a bit of a headache for small business owners. Some goods and services benefit from a reduced VAT rate, others have a zero rate of VAT, a few are entirely VAT exempt while most carry the standard 20% VAT rate. But what about payments to Companies House? Which rate of Value Added Tax would a small business pay on Companies House charges?

The simple answer

In most cases the answer is very straightforward – payments to Companies House are exempt from VAT, so small business owners do not pay VAT on Companies House charges.

However, the real answer may be less clean cut if your small business doesn't manage its Companies House filings and payments in house, and uses a private company to handle them instead.

The less simple answer

Many small businesses don't have the time, inclination or resources to manage Companies House filings in house. Some private companies offer support services designed to help these small businesses incorporate a new business, file annual statutory accounts, file details about newly appointed company directors, and so on.

While direct payments to Companies House are exempt from VAT, some private companies may charge VAT on the full cost of their filing service, including the payments they make to Companies House on behalf of a small business. This obviously makes the overall cost of Companies House payments considerably more expensive for small business owners!