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VAT Registration - When should I register?

Your business should register for VAT if your "taxable supplies" over the past 12 months has exceeded the VAT registration threshold. The threshold is currently £68,000 (as of 1st May 2009, previously it was £67,000). It is important to remember that VAT applies to the company's turnover, not profit.

"Taxable Supplies" are any goods and services that are subject to VAT at any rate, including zero rate.

So, if at the end of any given month, the total value of all your taxable supplies over the previous 12 months exceeds £68,000, you should register for VAT. Additionally, you should also register if you expect your turnover to exceed £68,000 over the next 30 days.

Even if you don't have a legal requirement to register (i.e. your annual turnover hasn't exceeded the VAT threshold), you may voluntarily decide to register for VAT.

Being VAT registered may help give the impression that you run a larger company than is the case, and this may improve your company's image with clients. If you are VAT registered, you can also claim back VAT you've paid on any business purchases.

You can read about the VAT registration process in detail at the HMRC site here.

You can register for VAT by filling out one or more HMRC forms, or simply do it online. Full details are here.

Alongside the "standard" VAT scheme, you may also be interested in the Flat Rate VAT Scheme, depending on your business circumstances. Follow the links below for more information.

Further VAT Resources on Bytestart

VAT Registration - Tips and Traps

Overview of Value Added Tax

Overview of the Flat Rate VAT Scheme

Overview of the VAT Cash Accounting Scheme

Posted August 22, 2008

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Latest articles in Value Added Tax

VAT - Value Added Tax Guide
A summary of Value Added Tax for small businesses. When you should register for VAT, what the registration threshold means, how you repay VAT to HMRC, and links to further information. [May 18, 2009]

Detailed guide to the new VAT penalty regime from April 2009
April 2009 marks the introduction of a new VAT penalty regime. This article provides an in-depth guide to how the penalties will work. [March 31, 2009]

VAT refund deadline looms - firms urged to get claims in
Companies have until the end of March to send in VAT refund claims to HMRC for the period from 1973 to 1997. However, a big barrier to successful claims may be the lack of original accounting records. [February 25, 2009]

VAT Registration - Tips and Traps
An overview of the VAT registration process, when you should register and some handy tips. [December 16, 2008]

VAT rate change - practical tips for businesses
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VAT Rate Reduction to 15% - How does it affect your business?
The standard VAT rate will be reduced from 17.5% to 15% between 1st December 2008 and 31st December 2009. This article explains how this change will affect different types of business, including details on tax point issues and special schemes. [November 27, 2008]

VAT on "services" - some basics
VAT law states that a service is the supply of anything that is “not goods”. That leaves a lot of very different types of supply all falling under the one category of “services”. This article provides an overview of how VAT applies to "services". [October 14, 2008]

VAT registered businesses should use sequential invoice numbers
From 1st October 2007, new VAT invoicing regulations came into play which some small companies may not be aware of. From this date, all invoices issued should use an identifying number that is unique and sequential. Contains some HMRC FAQ's to help meet the new requirements. [October 9, 2008]

Reclaiming VAT from 1973-1997 - deadline looming for applicants
It's not often that companies can claim anything back from the tax man, but many businesses could be missing out on claiming VAT rebates over a 24 year period from 1973 to 1997. [August 26, 2008]

VAT Registration - When should I register?
When should you register your business for VAT, why you might want to voluntarily register, and where to find out more about the registration process. [August 22, 2008]

Flat Rate VAT Scheme - An Overview
Alongside the standard VAT rules, some small businesses may be better off by operating within the flat rate VAT scheme [August 13, 2008]

VAT Cash Accounting Scheme Guide
As the credit crisis continues, many small businesses are finding that debtors are taking longer to pay their bills. If your business qualifies, you could greatly benefit by using the VAT Cash Accounting Scheme. [May 9, 2008]

VAT Update - Correction of errors made easier in Budget 2008
A helpful change in Budget 2008 is the increase in the limit below which errors can be adjusted on a VAT Return. [April 17, 2008]

VAT Update - Claiming back VAT from 1973-1997
Following the 2008 Budget, and a number of Court cases, the door has opened for many businesses and charities to recover VAT overpaid from 1973 to 1997. [April 14, 2008]

VAT Update - Withdrawal of Staff Hire Concession
Under current VAT rules, employment agencies (and other firms) charge Value Added Tax on their 'profit margin', not on the total amount received. This concession is to be withdrawn from 1st April 2009. [April 9, 2008]

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