A Guide to VAT for Small Businesses

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A Guide to VAT for Small Businesses

VAT can be a complicated tax and small businesses need to be clear on when to register and what their responsibilities are. We have created a short guide on VAT registration Uk that will answer some of the most common questions.

vat registration uk

Who Needs to Register?

 In the UK your business needs to register if your taxable turnover is over £85,000. The taxable turnover is the total value of everything you sell. It is compulsory when your taxable turner will go beyond the £85,000 in the next 30-days or if your business exceeded it over the last 12 months. This is on a rolling basis so you must keep track every 30-days and every year. 

You can find out if anything you sell is exempt from VAT. Once registered, HMRC will send you a certificate that will include your VAT number, when to submit your return and payment, and the date of your registration. 

What Happens After VAT Registration? 

From the date of your registration issued by HMRC, you will then have to charge VAT at the correct rate, pay any VAT due, use a VAT account, keep records, submit returns, and follow the Making Tax Digital for VAT guidelines.  If you register late then you will need to pay the VAT owed and you may receive a penalty. 

How to Register?

You can register for VAT online or by post. Online is faster and easier but some businesses cannot register online and will need a VAT1 from. This can apply to you if you are using separate VAT numbers for different sectors of the business, are joining the Agricultural Flat Rate Scheme, or are applying for a registration exemption. To find out more contact the team at BNA Consulting and will handle the registration process for you. 

After registration, your certificate will arrive within 30 working days. If you have registered online, your certificate will be sent to your online account, if by post it will be sent to you. 

Other Scenarios

There are other VAT responsibilities that your business may face. These include:

Taking Over an Existing Business – If you decide to take over a business then you need to check the VAT registration UK. Even if it is already registered you may also have to register yourself. 

VAT Outside of the UK – The VAT threshold does not apply to businesses outside the UK. But, if your business sells goods or supplies services to the UK or you expect to in 30 days, you will need to register.

Digital Services – If you provide digital services to countries in the EU then you will need to register in those countries even if it is below the UK threshold. You must register in each country you supply services to if the amount is over £8,818. The services covered by this rule include eBooks, music downloads, games, etc. 

Changing Information or Cancelling Registration

If you need to change any information, transfer your registration, or cancel it you can do so. You can visit the government website and it will take you through each process.