You must register your business for VAT if your business meets the following criteria:
• Your business’ taxable turnover exceeds £85,000 in the past 12 months
• You expect it to exceed the turnover threshold in the next 30 days.
What is the VAT taxable turnover?
The VAT taxable turnover is the total value of VAT included sales. Therefore, this should include sales that attract VAT at the standard or reduced rates. Or even those sales that are zero rated. Just not sales that are exempt from VAT.
An exception would be exceeding the threshold temporarily. So, should you exceed the VAT registration threshold but expect that your next VAT taxable turnover will not exceed the deregistration threshold (£83,000) you can appeal to HMRC by writing to them with supporting evidence of why you believe you will not exceed the deregistration threshold in the next 12 months.
HMRC will the review your appeal and either send you a letter of acceptance of your appeal or they will register you for VAT.
As stated above, registration is mandatory if your taxable VAT turnover goes over the threshold. But if your VAT taxable turnover is below the threshold you can still register for VAT voluntarily. Some businesses that supply zero-rated goods choose to do this due to the benefits of reclaiming VAT on purchases.
How to get registered
You can apply online at gov.co.uk, or you can register by post by using the VAT1 form.
Although please bear in mind that there are additional forms to be completed for certain businesses such as those applying to the agricultural flat rate scheme.
You will then receive a registration number once your application has been processed. This will be then followed by a VAT registration certificate within 30 day of registering.
Most businesses are able to register online on the Gov.uk website. In certain cases, registration must be done by post, for example, if you apply to join the agricultural flat rate scheme.
You will receive a VAT registration number once you have been registered for VAT. You should receive a VAT registration certificate within 30 days.
What it means to be a VAT registered company
Once you are registered you will then have to charge VAT appropriately on any sales that you make. Additionally, you can reclaim any VAT that you are charged on business purchases.
You must also remember to file VAT returns each quarter. But we can help with this. We can pay HMRC directly for you. Meaning that you can spread the cost of your VAT liability over the course of 3 months, ensuring that your cash remains flowing with ease.
If you are interested in protecting your cash flow against the sting of your tax liability, please do get in touch. We offer VAT loans, as well as corporation tax loans at industry leading rates allowing you to keep your precious cash in the business. Why not give us a call today on 01494 956 871. Or send an email to [email protected] and a friendly member of our sales team will get back to you.