Dear John,

I've reviewed the VAT figures for Q4 2024, and I can explain why your VAT payment is £2,400 higher than last quarter.

There are three main factors contributing to this increase:

1. Sales Growth (18% increase)
Your December sales were significantly higher than usual, generating an additional £1,200 in output VAT. This is actually positive news – your business grew substantially during the holiday season.

2. Equipment Purchase
The £8,000 equipment purchase in November included £1,600 in VAT (20% rate). While this is a one-time cost, it's reflected in this quarter's figures.

3. Lower Input VAT Credits
Your input VAT credits were £400 lower than Q3 due to fewer deductible expenses. This is normal for your business cycle based on historical patterns.

In summary: The higher VAT payment primarily reflects strong sales growth, which is excellent for your business. The equipment purchase is a one-time cost that won't recur next quarter.

Please let me know if you'd like me to break down any of these points further.

Best regards,
Sarah