Help Centre

Do I need to register for VAT?

You don’'t have to register for VAT if your business turnover is below the VAT threshold (£85,000 from 1 April 2017). However, a lot of businesses tend to register for VAT anyway as it can allow you can reclaim VAT on purchases for your business.  It can also make your business seem more credible to clients.

If you expect your turnover to hit the VAT threshold, then registering for VAT is mandatory. You need to allow at least 30 days to register with HMRC before reaching the threshold. This is due to the time it takes to process registration. Failing to do so on time may result in a fine.

To get your business registered, simply get in touch with your financial analyst and we’ll take care of the rest.

Advantages of voluntarily registering for VAT

  • You can reclaim the VAT on your expenses (Standard rate scheme only).
  • There are potential savings to be made by being VAT registered (Flat rate scheme only).
  • You might want to register voluntarily if your clients are large companies who are themselves VAT registered. They will be used to seeing prices net of VAT, and will be able to reclaim the VAT.
  • It may make you more credible in the eyes of your clients, in quite the same way that having a limited company makes you more credible.

Disadvantages of voluntarily registering for VAT?

  • If your clients are smaller companies and not VAT registered, you may seem more expensive and possibly lose clients. This is because registering for VAT would require you to add 20% to the net cost of your invoices.
  • With VAT registration there comes additional responsibility. This is because you are required to complete and file a VAT return every 3 months. If a return is late, there will be a penalty from HMRC. However this isn’t something you need to worry yourself about - just make sure your account is up to date each month and let us know when it’s time to file.

Did you find it helpful? Yes No

Send feedback
Sorry we couldn't be helpful. Help us improve this article with your feedback.