VAT
6 min read
VAT registration: when you must register, and when you should
Registration is compulsory above the threshold, but registering earlier can make sense. We explain how to check your turnover and what to weigh up.
The compulsory test
You must register when your taxable turnover in the last twelve months passes the VAT threshold, or when you expect it to pass the threshold in the next thirty days alone. The test is rolling, not based on your accounting year.
Why some businesses register early
If your customers are VAT-registered businesses, charging VAT costs them nothing, and you can reclaim the VAT on your own costs. For some start-ups that is a real saving.
When early registration costs you
If you sell mainly to consumers, adding VAT either raises your prices or reduces your margin. In that case it usually pays to wait.
Choosing a scheme
The standard, flat rate and cash accounting schemes suit different businesses. We run your figures under each and show you the difference before you decide.