When to register for VAT
Businesses are required to register for Value Added Tax (VAT) when they reach a certain turnover threshold or anticipate exceeding the threshold in the near future.
The current VAT registration thresholds are as follows:
If taxable turnover exceeds £85,000 within a 12-month period. Taxable turnover includes the total value of goods and services you sell that are not exempt from VAT.
If you expect taxable turnover to exceed £85,000 in the next 30 days.
It's important to monitor turnover regularly and keep track of sales to determine if the business is approaching these thresholds.
You can register for VAT online through the government website or seek assistance from an accountant to ensure the process is completed correctly. Note that it can now take two to three months for the VAT registration to be processed by HMRC so the sooner this is completed the better.
It is also worth noting that even if your turnover is below the registration threshold, the business can still voluntarily register for VAT. This can be advantageous in certain situations, such as if the businesses clients are mostly VAT registered businesses who can reclaim VAT or if the business want to claim a substantial amount of input VAT on expenses.
You should also consider if the standard or flat rate scheme would be most beneficial when registering for VAT.
Since VAT regulations can change over time, I recommend checking the latest guidelines with HMRC or consulting with an accountant for up-to-date and tailored advice based on your specific circumstances.
For more information on registering for VAT you can contact me at will@matrixaccountancyservices.com or you can book a free consultation call here - https://calendly.com/matrixaccounts