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Vat registration

HAVING READ THIS ARTICLE JUST WONDERING ANY LEGAL ADVICE ON REGISTERING FOR VATHE BIT WHAT INTERESTS ME IS CONSECUTIVE YEARS ON TURNOVER EXCEEDS YOU NEED TO REGISTER, SO ARE THEY SAYING IF YOU GO OVER ONE YEAR YOUR OK ?????CAN I JUST ASK FOR EXCEPTION FOR 1 YEAR ???ANY VIEWS PLEASECompulsory registration: VAT thresholdA business must register for VAT if its taxable turnover for any consecutive 12-month period exceeds the VAT registration threshold. The current VAT registration threshold (from 1 April 2016) is £83,000 but this tends to increase every year.Another common reason why a business may be forced to register for VAT is if it takes over an existing business that is VAT-registered. The test is if the taxable turnover of the purchaser for the last 12 months added to the turnover of the business being purchased is over the VAT registration threshold – if the answer is yes, then the business is obliged to register.There is also an obligation to register if you think your business’ turnover will exceed the threshold within just 30 days, but for most businesses, this would not apply. There are other scenarios when VAT registration becomes compulsory, for instance if you are trading outside of the UK.Failure to register on time may lead to late registration penalties and/or ‘failure to notify’ penalties. What’s more, surcharges and interest are likely to be charged for late payment if the business has a VAT liability. If your business’ turnover exceeds the VAT registration threshold temporarily, you can ask HMRC for an exception from registration.

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Replies

  • You have to register for VAT before your turnover for the last 12 consecutive months reaches £83,000. It's best to get your accountant to register your business because there are schemes where you can pay a set amount every month (say £1000) and then pay any balance at the end of the next 12 month period.

    • PRO
      Why would you want to defer payment though Adrian? Surely better to be up to date?
      • Im not a tax expert by any means, but I do know that there are a range of schemes to make it easier to pay rather than to have to pay one very large sum every three months. This has the effect of smoothing out cash flow to some degree and you know exactly how much you need to pay every month. If you overpay over the 12 months, then you can reduce the following 12 months payments by a small amount, or increase it if underpaid. Best to talk to a professional Accountant.

        • PRO

          What VAT scheme do you use ?

        • PRO
          Maybe but I don't see the issue. It's not your money so keep it in a separate vat account and pay up when due.
          It's only like income tax I put a percentage of all takingbinto a separate account (i put 40%) away and it's always too much but that then becomes a bonus pot for new gear or even a holiday
  • PRO Supplier

    Hi Chris. You're best of registering for VAT early as you can - in theory you're meant to do it when you 'think' your turnover will breach the £83k threshold. Records for appeals against late registration isn't hopeful, usually results in penalties/fines.

    You can always deregister later if you want to.

    Regards to the VAT scheme, as a small business best to go on the cash basis - you kick up the VAT on the cash that comes in that quarter, not the sales made.

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