5th February 2018

VAT continued: how, when (and where) to register

Here we cover a brief overview on a few more FAQ’s we receive about VAT that are covered in more detail on the HMRC website.

You must register for VAT if:
* your VAT taxable turnover is more than £85,000 (keep an eye out for threshold changes every April 1st) in a 12 month period
* you expect to go over the threshold in a single 30 day period

Note: You’ll also need to register if you only sell goods or services that are exempt from VAT or ‘out of scope’ but you buy goods for more than £85,000 from EU VAT-registered suppliers to use in your business.

You may have to register for VAT if you take over a business that’s already registered.

Late registration
You must register within 30 days of your business turnover exceeding the threshold. If you register late, you must pay what you owe from when you should have registered.

You may get a penalty depending on how much you owe and how late your registration is.
You can register voluntarily if your business turnover is below £85,000. You must pay HMRC any VAT you owe from the date they register you.

How to Register for VAT
You can register online or through the help of an agent and have a VAT online account created. Or you can register by post using a VAT1 form.

Getting your certificate
You should get a VAT registration certificate within 14 working days, though it can take longer either to your VAT online account or by post if an agent registers you or you can’t register online.

Registering for VAT in other EU countries
Usually, you only need to register for VAT where you’re based.
But if you’re supplying digital services to consumers based in other EU countries, you must either register for VAT in each country where you’re supplying digital services or sign up for the VAT MOSS service.

Calculate VAT taxable turnover

The current threshold is £85,000. It usually goes up on 1 April each year. There are different thresholdsfor buying and selling from other EU countries.

To check if you’ve gone over the threshold in any 12-month period, add together the total value of your UK sales that aren’t VAT exempt, including:
* goods you hired or loaned to customers
* business goods used for personal reasons
* goods you bartered, part-exchanged or gave as gifts
* services you received from businesses in other countries that you had to ‘reverse charge’
* building work over £100,000 your business did for itself
Include any zero-rated items – only exclude VAT-exempt sales, and goods or services you supply outside of the UK.

You must register straight away if you expect the value of everything you sell in the UK which isn’t VAT-exempt in the next 30 days alone to be over £85,000.

Photo credit: Webb and Wallace