If you’ve just started a new business, registering for VAT may be the furthest thing away from your mind. However, as your business grows and adapts, VAT is something that should be considered. While it is a legal requirement for businesses making over a certain amount of income, some business owners opt to do so before reaching the official threshold to be more tax efficient.
No matter how you want to handle your VAT registration, Every Penny Accounts is here to help. As professional accountants, we provide a range of services to streamline your business operations, including assisting with VAT registration. Our team has created this helpful article to keep you informed on VAT and guide you through how to register for it.
What is VAT and How Does it Impact My Business?
VAT (Value Added Tax) is added to most products and services that are provided by VAT registered businesses. This means that a registered business must include VAT in the cost of all services and goods at the right rate, keep records of VAT expenses for business purchases, report on the VAT charged to your customers or clients to HMRC every three months, and pay any VAT owed to HMRC.
While some businesses are exempt from paying VAT – usually because they are under the required threshold to do so – for many larger businesses it is required. There are three different VAT rates that can be added to products and services, and the one you will use depends on the type of product or service you offer. Most items or services will have a 20% VAT rate attached, but there are some goods that fall under reduced or zero-rated too. For more information on this, get in touch with the team at Every Penny Accounts to chat with a reliable accountant.
What is the VAT Threshold?
The VAT threshold is very reasonable and supports the growth of sole traders and small businesses who are finding their feet in their industry. However, once you reach a certain turnover each year, you are required to register for VAT. The threshold currently is a turnover of £90k a year, and VAT must be registered if this was your income over the last 12 months, or you expect this figure to roll over in the next thirty days.
Some businesses must register regardless of this taxable turnover if they:
- Are based outside the UK
- Own a business that is based outside the UK
- Supply services or goods to the UK
For further information on this, and more detailed outlines on requirements for registering for VAT, Every Penny Accounts can assist. Get in touch now.
What You’ll Need to Register
There are a few things you will need to register for VAT, including your National Insurance (NI) number or your Unique Taxpayer Reference (UTR), details of any other businesses owned over the previous two years, and the bank account details of your business. Additionally, if you have bought the business you own, you will need to provide records of the sale.
Registration Options
Luckily, registering for VAT is free and can be done on your own, and there are a few different options available to do so, though each process may differ slightly from the other. The registration options available to you include:
Online Registration: Probably the most straightforward registration option – all you need is your Government Gateway ID, your business registration details, business bank account details, and your NI or UTR.
Postal Registration: To register for VAT by post, you need to fill out a VAT1 form and send it to HMRC directly. When applying by post, you can apply for a registration exception, register multiple businesses under different VAT numbers.
Using an Agent: If you’re unsure or require assistance, you can also appoint an accountant to submit your VAT registration and returns to HMRC on your behalf – this means a huge reduction in risk and errors that could negatively affect your business.
Reach out to Every Penny Accounts today for more information
If you would like to know more, or to talk with our team about any of our accounting services, get in touch with Every Penny Accounts now! We offer a wide range of accounting services, including bookkeeping, payroll, and accounts – and we can help you with your VAT too. Don’t settle for a lesser service when you can have one of the top choices in the UK, reach out now!
