Find out when and why you should register for VAT...
Since we have had a recent VAT registration ourselves, we thought it would be right to explain how VAT works to those of you who aren’t familiar with it. We also would like to ensure all our clients whose turnover is above a threshold are following Government Guidelines in relation to the mandatory registration for VAT.
You must register your business for VAT with HM Revenue and Customs (HMRC) if its VAT taxable turnover is more than £85,000. When you register, you will be sent a VAT registration certificate. This confirms your VAT number, when to submit your first VAT Return and payment, your ‘effective date of registration’ - this depends on the date you went over the threshold or is the date you asked to register if it was voluntary.
Once VAT registration has been accepted by HMRC, you must start to charge VAT on your Sales invoices, subject to the products or services being invoiced for being VATable products or services. At the end of the month or quarter, depending on your VAT registration, you must then repay the VAT you have charged your customers to HMRC, less any VAT you have incurred on your business purchases.
If you are unsure whether you should register for VAT, please visit the Gov.UK website searching ‘VAT’ or contact us directly.
