Should I register for VAT? A brief intro to VAT registration

Cope & Co Accountants in Wirral offer VAT advice and VAT filing services throughout Merseyside. Here, we offer a brief introduction to VAT for start-ups.

Whether you’re a sole trader, a limited company or in another business structure, your need to register for VAT depends on your business’s turnover within any 12-month period. It’s not about the type of business you run, but how much money you make.

You’re required to register for VAT if your business turnover exceeds the £90,000 threshold within any 12-month period. Also if you expect your turnover to surpass this threshold in the next 30 days, you must register. Some businesses choose to register for VAT voluntarily before reaching the threshold, as it can be more tax-efficient, although this is optional until the threshold is met.

Upon registering for VAT, you’ll receive a VAT registration certificate containing your VAT number, the deadline for your first VAT return and your effective date of registration. This date is either when you exceeded the threshold or when you opted for voluntary registration. Keep in mind that VAT registration can impact your sales profit, which might necessitate adjusting the prices you charge your customers.

You should ensure you maintain good, compliant VAT records. We can help with that. Friendly, modern accountants based in Wirral, we offer VAT advice and a full range of VAT services to our clients across Merseyside.

VAT is charged on taxable goods and services, known as “taxable supplies,” sold by VAT-registered businesses. This tax is then passed on to HMRC when you submit your VAT return. Being VAT-registered allows you to reclaim VAT paid on business purchases.

You need to submit regular VAT returns to HMRC, detailing how much VAT you owe or should be refunded. If you’ve charged more VAT on sales than you’ve paid on purchases, you’ll pay the difference to HMRC. Conversely, if you’ve paid more VAT than you’ve charged, you can claim the difference back.

What about VAT for sole traders with multiple businesses? Well, as a sole trader, there’s no legal separation between you and your business. Therefore, all income from multiple sole trader businesses is combined for VAT purposes, affecting when you need to register. VAT applies to taxable supplies across all your businesses.

For tailored advice and assistance with VAT registration and compliance, contact Cope & Co. We’re here to support your business every step of the way! We’re Wirral based Merseyside accountants who offer tailored VAT advice and VAT services to our clients in diverse sectors across the region.

Call us on 0151 374 0875 or write to us at enquiries@copeco.uk. Alternatively, visit our contact page to book a free, no obligation call back.

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