Questions and Answers
Should I register for VAT?
I have just started my own business and I have paid a lot of VAT on the purchase of a van and other start-up costs. I am considering whether I should register for VAT so that I can get this VAT back.
By Catherine Heinen, FCCAVAT registration is only compulsory once your taxable turnover is over the VAT registration threshold (which is currently £90,000). But if your turnover is under this, you may register voluntarily.
It can be beneficial for a business to register for VAT, and speaking to your accountant regarding this could be a valuable conversation. To start the conversation, you may want to look at the HMRC VAT estimator. Using the estimator, you can enter some amounts and establish whether it could be beneficial to register for VAT.
Once you register for VAT, in general, you can recover VAT on your business expenses. You may also be able to recover VAT on pre-trading expenses. You also have to charge VAT on your sales to your customers.
Voluntary VAT registration can be advantageous, but it depends on the circumstances. The main consideration is who your customers are:
- members of the general public can’t recover the VAT you charge them, so the price of your services or products will increase and could make you less competitive.
- other VAT-registered businesses will be able to recover the VAT on your invoices, so it doesn’t affect them if you register for VAT.
How TaxAssist Accountants can help
There are many things to consider when deciding if VAT registration is suitable for your business. Speaking to a professional can help get your tax affairs right and avoid overpaying tax or losing customers. Please contact our team if you would like to discuss this further on 01438 340111 or use our online contact form.
Frequently Asked Questions
In the UK, you need to register for VAT if your taxable turnover exceeds the VAT threshold. There are two tests to determine if you have to register:
- your taxable turnover for the last 12 months is over the VAT threshold
- you will exceed the VAT threshold in the next 30 days
You must register for VAT within 30 days of realising for both the above tests.
Self-employed people must register for VAT if their taxable turnover exceeds the VAT threshold. Your taxable turnover is your sales income that is not exempt or outside the scope when it comes to VAT.
You must register for VAT if your taxable turnover exceeds the VAT threshold. It may be beneficial to register for VAT even if you don't meet the VAT threshold. To consider your options, speak to an accountant.
Date published 5 Dec 2012 | Last updated 31 Jul 2024
This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.
Catherine Heinen, FCCA
Catherine is a Technical Content Writer at TaxAssist Accountants, and a qualified accountant. With experience working at two accountancy practices in the UK top 50 accountancy firms according to Accountancy Age, Catherine has significant experience in accounts, tax returns and advising clients. Catherine ensures businesses, business owners and individuals are kept up to date and informed by providing concise and informative technical material.
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