If your business's taxable turnover for VAT reaches the registration threshold, you must register your business for VAT. At the moment, this is worth £85,000.
If any of the following apply to you, you must register:
You have a taxable supply that has a value greater than £85,000 at the end of any month, or if you expect the value of your taxable supplies in the following 30 days alone to exceed £85,000 at any time over the past 12 months or less.
Businesses based in Northern Ireland are subject to different thresholds when purchasing from and exporting to nations in the European Union.
The taxable turnover for VAT purposes is
The total value of sales that are not exempt from VAT is referred to as the VAT taxable turnover. You should include sales that would be subject to VAT at the standard rate, the reduced rate, or zero rate, but you should exclude sales that are exempt from VAT from your calculations.
Exemption from the requirement to register
In the event that your taxable turnover exceeds the VAT registration threshold but does not exceed the deregistration threshold, which is currently £83,000 in the next 12 months, you can apply to HMRC for an exception from registration. If you believe that your taxable turnover will not exceed the deregistration threshold in the next 12 months, you can apply to HMRC for an exception from registration. This can be accomplished through the use of the VAT1 form. Especially if the sale is one-time and vast in scope, this could be the situation.
Registration on one's own initiative
If your taxable turnover reaches the registration threshold, you must register with the VAT authorities (unless an exception applies). However, if your taxable turnover for VAT is less than this threshold, you may choose to register for VAT on a voluntary basis. As a supplier of zero-rated items (such as food), this can be advantageous because it allows you to collect any VAT that you have paid on your purchases back from the government.
Instructions on how to register
The Gov.uk website offers the ability to register most types of businesses online. In some instances, such as when applying to participate in the agricultural flat rate plan, registration must be completed via the postal service.
Once you have been approved for VAT registration, you will be issued with a VAT registration number. You should obtain a VAT registration certificate within 30 days after submitting your application.
Consequences of being a VAT-registered business
Having registered for VAT, you will need to charge VAT on all sales that you make at the relevant rate once you have completed your registration. In addition, you will be able to deduct any input tax that you have paid on your purchases.
You may decide to join one of the schemes in order to simplify the process and lower the related VAT return, such as the flat rate plan for small businesses, which simplifies the process and reduces the associated VAT return.
In addition, you must file VAT returns each quarter and pay any VAT owed to HMRC, as well as comply with the Making Tax Digital requirements for VAT. An agent, such as an accountant, can file your VAT returns on your behalf if you do not want to do so yourself.
Get in contact with us
Get in touch with us today to learn more about how we can assist you in being compliant and to take advantage of our experienced advise(Cheap Accountant In London).
Comments