VAT registration guide: When and how to register for VAT

Gwen Catherine


Want to obtain out all you have to have to know about registering for Price Additional Tax (VAT)?

You have appear to the right put.

It is crucial to have an understanding of VAT and what it suggests for your small business, and be obvious on the £85,000 VAT threshold. If VAT registration is on the playing cards for your company, you can sign up for VAT on the net.

And after your small business is VAT registered, you are going to will need to use Producing Tax Digital to submit your VAT Returns.

Study this report to master about VAT, including how to sign-up for VAT, and find out the obtainable VAT strategies.

Here’s what we deal with:

Who desires to register for VAT?

You must sign-up for VAT if the taxable turnover of your business has reached £85,000 (at the moment the VAT threshold) or far more about the earlier 12 months, or it is probable to do so in the coming year.

Failing to register for VAT online or employing a VAT1 kind when your turnover grows beyond £85,000 could result in a significant fantastic from HMRC.

Can you voluntarily sign-up for VAT below the threshold?

Certainly. You can voluntarily register if your business has an yearly taxable turnover of less than £85,000.

What are the benefits of registering for VAT?

You might want to sign up voluntarily to prevent shelling out VAT on business expenses—you can claim income again when you file your VAT Return.

Say you’re opening a café or starting up a professional solutions firm, and you have to have to invest in chairs, tables, personal computers and stationery, between other products.

You can reclaim the VAT element of this expenditure from HMRC and pump that income into the enterprise ahead of waiting around for its turnover to exceed £85,000.

As nicely as this sensible position, many corporations desire their customers, suppliers and opponents not to know how large they are.

If you are not VAT registered, they will know your turnover is significantly less than £85,000.

Among the gains of VAT registration is the image of gravitas and professionalism that it develops for your company.

Declaring: “Am I VAT registered? Of course, of study course,” tends to make it crystal clear you’re a “proper” business enterprise in the eyes of numerous shoppers and suppliers.

Every single quarter you need to send out your VAT returns to HMRC (except if you’re making use of a diverse VAT plan, these kinds of as the Yearly Accounting VAT Scheme—see the ‘VAT schemes to pick from’ section underneath).

Some enterprises come across this further administration inconvenient, but you could possibly like the actuality that it forces you to consistently retain your publications up to date.

How do I register for VAT?

There are two most important techniques to sign up for VAT: Sign-up online or use a VAT1 paper type.

Fortunately, each approaches are uncomplicated if you have anything that you require to register.

What do I need to have to sign up for VAT?

To full your VAT registration, you’ll will need:

  • Your business make contact with facts
  • Lender account details
  • Exceptional Tax Reference number
  • Facts of your turnover and character of enterprise.

Registering for VAT on the web

To sign-up for VAT, you require a Governing administration Gateway ID—a sequence of 12 digits you use alongside a password to obtain the HMRC portal.

Your Federal government Gateway account is your VAT on line account.

Registering for VAT on the web without having a Governing administration Gateway

  • Go to the Register for HMRC taxes site, decide on the correct selection, and then click on the “next” button to go by means of the pages.
  • On the remaining site, pick out “Create an account for me”.
  • Enter your specifics to build your Governing administration Gateway ID. Hold your consumer ID and password in a protected spot as you are going to need to have to refer to them consistently.
  • On the sign in site, enter your Federal government Gateway specifics.
  • Once logged in, scroll down to the “Get a further tax, responsibility or scheme” area of the web site and click the button underneath this.
  • Decide on VAT and comply with the remaining ways to total your VAT registration software.

Registering for VAT on line if you have a Government Gateway

  • Go to the Register for HMRC taxes website page, find the proper solution, and then click on the “next” button to go by way of the internet pages.
  • Select “I have an account – login” on the ultimate web site.
  • On the signal in webpage, enter your Governing administration Gateway facts.
  • When logged in, scroll down to the “Get an additional tax, obligation or scheme” section of the web page and click on the button beneath this.
  • Decide on VAT and observe the remaining steps to total your VAT registration software.

Registering for VAT using the VAT1 variety

Most corporations can sign up online.

Nevertheless, there are situations wherever you’ll want to sign up your organization for VAT offline, these types of as when you’re:

  • Making use of for a VAT registration exemption
  • Registering many enterprise models less than different VAT quantities
  • Becoming a member of the Agricultural Flat Amount Scheme.

If you can not sign-up on the internet, you’ll require to fill out a VAT1 sort and ship it to HMRC in the article.

VAT schemes to decide on from

There are many distinct groups of VAT that you need to investigate right before you sign up for VAT.

If you have an accountant or a enterprise adviser, you can check with them for aid to become VAT registered and which scheme to pick.

In this article are some VAT schemes to consider:

Yearly Accounting VAT Scheme

With the Yearly Accounting VAT Plan, you can total one particular VAT Return a yr.

You will make advance VAT payments to your VAT dependent on your previous return or an believed determine if you are new to VAT.

VAT Flat Level Plan

The VAT Flat Level Scheme is the place specific corporations pay out a share of their turnover as VAT—a more simplified VAT Return procedure.

In its place of deducting VAT on its inputs (in other phrases, what it buys), you deduct VAT on its outputs (what it sells).

It is most relevant to companies that commit a compact amount of money on goods and raw supplies, this sort of as company suppliers.

VAT Income Accounting Scheme

With the VAT Dollars Accounting Scheme, you only spend VAT the moment you have been given payment from your prospects.

You reclaim the VAT compensated on purchases after you have paid out your suppliers.

What occurs when you sign up for VAT?

Once you’ve registered for VAT:

  • The method will produce a VAT on the net account for you, occasionally acknowledged as a Government Gateway account. This is in which you will acquire your VAT certification. It usually takes up to 30 times to get it.
  • The VAT certificate confirms your VAT number and tells you when you will have to have to submit your to start with VAT Return and payment.
  • You are then completely ready to submit your VAT Returns. You’ll typically obtain automatic reminders from VAT about when to do this.
  • Your VAT accounting begins from the date you were being obliged to sign-up for VAT since you hit the £85,000 threshold or the time you determined to sign up voluntarily.

FAQs on registering for VAT

How do I post my VAT Return?

If you’ve registered or will sign-up for VAT, you need to post your VAT Returns with Generating Tax Electronic (MTD).

You can get up to pace with MTD with our checklist.

Can I register for VAT with no turnover?

You can sign up for VAT voluntarily right before turnover generates an obligation to sign-up.

You may well want to do this to recover VAT in start out-up expenditures.

How prolonged does it take to sign up for VAT?

You need to get a VAT registration certification within 30 functioning days, however it can just take for a longer period.

Do I want a Authorities Gateway account to sign-up for VAT?

Of course, your Government Gateway account is your VAT on the net account if you register on the net.

You don’t have to have an online account if you are registering by submit.

How do you sign up for VAT when you are self-employed?

You must sign-up for VAT as outlined in this report if your turnover reaches more than £85,000 in a 12 months.

How do you register for VAT as a sole trader?

Exact same as if you’re self-used.

You have to register for VAT as outlined in this write-up if your turnover reaches above £85,000 in a calendar year.

How significantly does it price to register for VAT?

There is no VAT registration value.

That doesn’t count what you may well need to have to pay out for an accountant if they entire your VAT Return.

Editor’s take note: This report was 1st released in November 2018 and has been up-to-date for relevance.


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