UK VAT Registration

It doesn’t matter what type of business you own or whether you are a sole trader or limited company, if your turnover is forecasted to be over £60,000 you must be VAT registered.

If, you believe, that in the next 30 days, your annual turnover is going to be above £60,000 then you must register.

If you do not there may be penalties. These are calculated at 5%, 10%, or 15%, dependent on the delay between the date of registration and the date HMCE receive your registration notification.

5% applies up to 9 months, 10% from 9 to 18 months, and 15% for a delay over 18 months. Since postal and other delays may occur, you should keep a a copy of your notification and the date on which it was despatched.

A penalty can be mitigated or cancelled in total if there are genuine circumstances that prevented you from submitting your application at the correct time.

Keeping VAT records

Once registered you need to charge VAT at the correct rate on all your sales – there are exceptions so check out the customs and excise website.

Additionally you can claim back VAT on all your business expenses but only if you have a proper VAT receipt.

Inspections can be made at businesses and records are checked on the VAT you have claimed or paid. So you must keep all your paperwork.

HMCE will send a VAT return form out to your registered business address each quarter and you must complete this and send back with your payment.

Sample Business Plans
Download a fully completed business plan for your industry online right now.
Includes narrative, financials and support