VAT Registration:
- Threshold: Businesses must register for VAT with HM Revenue and Customs (HMRC) if their VAT taxable turnover exceeds the registration threshold of £90,000. Turnover is measured on a rolling 12 months with registration normally required by the end of the month following the month where the threshold was exceeded.
- Voluntary Registration: Where a business’s turnover is below the threshold, it can choose to voluntarily register for VAT. This may be advantageous for businesses that want to reclaim VAT on their purchases or appear more credible to customers.
- Process: To register for VAT, businesses need to apply to HMRC, either online or by submitting a paper application. They will receive a VAT registration number upon successful registration.
VAT Deregistration:
- Threshold: Businesses can apply to deregister for VAT if their VAT taxable turnover falls below the deregistration threshold of £88,000.
- Process: Businesses can apply for VAT deregistration online through their HMRC online account or by submitting a paper application. Once HMRC approves the deregistration request, the business will cease to be VAT registered from the effective date specified by HMRC.
Implications:
- Invoicing: VAT-registered businesses must charge VAT on their sales (output VAT) and include their VAT registration number on invoices. Once deregistered, they can no longer charge VAT or reclaim VAT on purchases.
- Filing and Reporting: VAT-registered businesses must submit VAT returns to HMRC under MTD using recognised accounting software.
If you are in doubt and want to talk to someone, please give either of us a call
Call –Tim: 07875 410466
Call – Nic: 07985 645087
