Legally, you must register for VAT as soon as your business’ turnover reaches £85k (the VAT threshold for the 2017/18 tax year).
You’re not obliged to register for VAT before this, but there can be some advantages to being registered for VAT that will be beneficial for your business.
- You can raise the professional status of your business
- You can make use of certain VAT schemes to bring additional profit into the business
You have to balance this up against the increased workload:
- You have the responsibility of being a tax collector, and paying that money to HM Revenue & Customs (HMRC) every quarter.
- You have to account for the fact that the money you collect as VAT is already accounted for and spoken for. You can’t spend it, as you need to pay it to HMRC.
You need real self-discipline to have this VAT money in your business account and not spend it. If you don’t have discipline, you shouldn’t register – it will just lead to problems down the line.
If you’d like us to help with your VAT registration, give us a call on 01454 300 999, or drop an email to firstname.lastname@example.org