What is the VAT registration?

VAT or Value Added Tax is a tax that is added to some goods and services. Businesses whose turnover is above the VAT threshold have to register for VAT. After registration, you add VAT to all applicable sales, which HMRC collects through VAT returns.

Businesses whose turnover exceeds the VAT threshold have to register for VAT with HMRC. Once registered you have to charge VAT to your customers, which you then pass on to HMRC through quarterly VAT returns. Once you are VAT registered you can reclaim the VAT you’ve paid on purchases.

Some businesses choose to register for VAT even if their turnover hasn’t reached the VAT threshold. This is so they can reclaim VAT they’ve paid on goods and services. However it’s worth considering your customers before you do this; if you sell mostly to the public or non-VAT registered businesses you could lose business because they wont be in a position to reclaim VAT, so your prices will just go up. But if your customers are larger, VAT-registered businesses, it could be worthwhile.

Registering for VAT

Your business is legally obliged to become VAT registered once you reach the VAT threshold. If you are already signed up with Numberworx, we will advise you if you are approaching the threshold, help you choose the VAT scheme that will best suit your business and guide you through the process of registration.

Ask away!

We recommend you take professional advice before deciding to register your business for VAT. We are happy to answer any questions you may have.