One question we are getting asked a lot is….When Should I Register for VAT ?
In the UK, businesses must register for VAT if their taxable turnover exceeds a certain threshold, or if they choose to register voluntarily for financial reasons. Here’s a quick guide to help you determine when you should register for VAT :
- When Your Turnover Exceeds the VAT Threshold
The UK’s VAT registration threshold is currently £90,000 in taxable turnover over a 12-month period, its important to note this is a rolling 12 month period NOT from the start of your tax of financial year. If your business exceeds this threshold, you are legally required to register for VAT. It’s important to monitor your turnover to ensure you comply with the registration rules. - When You Expect to Exceed the Threshold
If you anticipate that your turnover will exceed £90,000 in the next 30 days, you should register for VAT immediately. The same applies if you’re close to reaching this threshold. - Voluntary Registration
Even if your turnover is below the £90,000 threshold, you can choose to register for VAT voluntarily. This might be beneficial if you want to reclaim VAT on business-related purchases or if your customers expect to deal with VAT-registered businesses. - Trading with Other EU or International Customers
If you’re selling goods or services to customers in other EU countries or internationally, you may need to register for VAT, regardless of your turnover. This is especially relevant if you’re importing or exporting goods.
When to Register
Once you exceed the £90,000 threshold, you must register for VAT within 30 days. If you’re voluntarily registering, you can do so at any time, but you’ll need to follow the proper application process.
Being aware of your turnover and staying on top of these regulations will help you avoid penalties and keep your business VAT-compliant. If in doubt, give us a call and we can guide you through it.