VAT Registration

6th August 2013

Do I need to register for VAT?
This is one of the many questions we hear from clients who have just started in business.
The compulsory VAT registration threshold is currently £79,000. If you expect your annual turnover to exceed that threshold quickly, then you are probably best registering on day one. If not, and if you are a B2C business, then you should probably delay registering until you reach this threshold.
To some businesses just starting out, reaching this level of turnover seems like a long way off. It may however be in your interest to voluntarily register for VAT, as soon as possible. Two of the most common reasons are:

  • If your customers are all registered for VAT. So there is no impact on charging VAT on your invoices to them and you can then reclaim the VAT charged on your expenses.
  • If you are a business that has very few expenses that you can reclaim VAT on, then registering for VAT under the “Flat rate scheme” could create an income from VAT Registration.

So what is the “Flat Rate Scheme” for VAT? The scheme was originally introduced to ease the administrative burden for small businesses by simplifying the process of completing VAT returns. The scheme works by paying a fixed percentage (relevant to your trade) of your gross income to HMRC each VAT period. You are unable to reclaim VAT under the scheme except where you purchase capital equipment costing over £2,000.
The scheme is available to any business with annual taxable sales excluding VAT of £150,000 or below.



 
Other items in Blogs
 
Amanda Newman
23rd August 2019 Changes in VAT for Contractors and Subcontractors

Confused by the new CIS reverse charge VAT rules that come into effect from 1 October 2019, then HMRC have issued further guidance at https://www.gov.uk/guidance/vat-domestic-reverse-charge-for-building-and-construction-services#overview.   The basics are as from 1 October 2019 if you are a VAT registered subcontractor working for a contractor you will no longer be paid for the VAT element…

Read More »

Ian Piper
23rd August 2019 31-Oct Brexit: How can SME’s prepare for no-deal?

As we edge ever closer to what looks more and more likely to be a ‘no-deal’ Brexit, SME business owners should now be readying their businesses.   There is clearly no certainty over quite how affected we shall all be by Brexit. However, there are sensible risk management mitigation steps that business owners may wish…

Read More »

Jaimie King
13th August 2019 Charity accounts assurance

Whether unincorporated, a charitable company or a CIO (charitable incorporated organisation), charities are required to have certain levels of assurance over their financial statements depending on their size. The limits are much smaller than companies, meaning that many charities require some sort of external scrutiny. The requirements by size are as follows: Income up to…

Read More »

Nick Edgley
24th July 2019 From April 2020 – 30-day Reporting and payment date on residential property disposals

From 6 April 2020 the Government is making some significant changes to the rules regarding the reporting and payment of Capital Gains Tax (CGT) when individuals, trustees and personal representatives dispose of residential property and it is important to be aware of these.   Currently such a disposal would be reportable on your tax return…

Read More »

Jodie Tarbin
23rd July 2019 Residential Property Tax News!

  Lettings Relief and Principal Private Residence Relief   Following my previous blog regarding the changes announced to the Principal Private Residence Relief (PPR) and lettings relief rules, the consultation period ended on 1 June 2019. You can view the consultation responses here.   HMRC have now published a policy paper on 11 July 2019,…

Read More »

Fiona Mann
22nd July 2019 Exam Success – World Beating Results!

  We’ve had some extraordinary exam results over the last few days – staff at Whiting & Partners have excelled themselves. Luke Bacon from St Ives office has achieved an outstanding result of 99% for the Financial Accounting and Reporting exam – coming joint first in the world.  This result has been recognised by the…

Read More »