VATReg - Simmers & Co

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Simmers & Co
Chartered Accountants

Frequently Asked Questions                                                                                      Print this page
Should I register for VAT?

This question could mean two things: "Do I HAVE to register for VAT" or "Should I CHOOSE to register for VAT".

    • You must register for VAT if your annual turnover is in excess of £79,000. This means that, if in ANY 12 month period your Turnover exceeds this figure, you have little choice and must register for VAT. (There are some instances, however, where this is not so and, if you are in doubt, you should seek professional help.) If you are not registered for VAT, you must, therefore, keep a note of your turnover on a rolling 12 month period and register when you feel you may exceed £79,000. There are time limits in force and you should ckeck these with your VAT office or seek professional help.
    • If your turnover is below the limit for registration (£79,000), you may, if you feel it is beneficial, apply to register for VAT. This is known as Voluntary Registration. Whether you should do so or not depends on many things, but you should decide with care (in fact we feel you should seek professional assistance to make your decision). You could end up with less profit if you get it wrong as the ability to "get back" the VAT on your purchase of allowable goods, might be more than offset by the part of your sales income which needs to be paid over to Customs and Excise.

VAT is a tax collected and paid over to Customs and Excise by those who are VAT registered. If you are registered for VAT, part of your invoiced sales is VAT which you are collecting to pay, usually every quarter, to government. You may deduct the VAT you pay on your purchases, of qualifying goods, from the amount collected from your sales - the balance is then paid over.

Some type of businesses are not able to register for VAT, whether or not they exceed to registration limit. Your accountant or Customs and Excise can help you find out if you come into this category.

This could be an expensive exercise if you get it wrong so it could be worth your while to seek professional advice.
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