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When to register for VAT?

When should I register for VAT?

When to register for VAT should be a straightforward question, but there is a lot to consider. This short article and video both outline the key points you need to consider in making your decision

A business MUST register for VAT when its VATable turnover reaches £85,000 in any rolling 12 month period, but there are reasons why a business might CHOOSE to voluntarily register for VAT before then.

Here are the top seven things you should consider to help you decide:

  • ✅ If you already have VATable expenses (especially for services) which you wouldn’t be able to reclaim the VAT on without being registered
  • ✅ If you are really confident you will exceed the VAT registration threshold in the coming year, it can be easier to just register from the get go
  • ✅ If all of your clients or customers are already VAT registered, then it doesn’t matter to them that you are adding VAT to your invoices
  • ❌ But if you sell direct to consumer and are competing with other small businesses, then registering for VAT will either make you 20% more expensive than your competitors, or hit your margins really hard!
  • ✅ Some larger organisations like their suppliers to be VAT registered
  • ✅ It can make you look like a bigger, more established business if you are VAT registered
  • ✅ Some industries and supplies are exempt from VAT – you need to know what you are supplying and to whom in order to make an educated decision

If you find article and video useful, then please pop on over to YouTube, where we have all sorts of videos to help you better understand the numbers that are really important for your business accounts, tax and growth.

There are playlists for VAT, Limited Companies, Sole Traders, Personal Tax, Small Business Advice, and much more, with content being added every single week.

If you need any help with your business, then do get in touch

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