Register for VAT

This article will explain how you can register you company for VAT while keeping in mind important aspects associated with this registration.

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1.   Check if you need to register for VAT

You need to register if:

  • Your business had a VAT taxable turnover of more than £85,000 over the last 12 months;

  • You expect your VAT taxable turnover to be more that £85,000 in the next 30 days.

Note that most VAT registered companies that earn over £85,000 must also follow the rules for “Making Tax Digital for VAT”

 

 

2.   Register for VAT with HMRC

​Check this link  to find out how you should register your business and what do you need when registering. You can register voluntarily if your turnover is less than £85,000, unless everything you sell is exempt (like insurance, or health services provided by doctors). 

Note that if you registered late, you must pay HMRC what you owe from when you should have registered. You may get a penalty depending on how much you owe and how late your registration is. 

 

3.    What you will receive

​You will get a VAT registration certificate (via your VAT online account or by post, depending on the way you registered) which confirms:

  • Your 9-digit VAT number;

  • When you should submit your first VAT Return and payment;

  • Your “effective date of registration” (this depends on the date you went over the threshold, or the date you asked to register if it was voluntary). 

4.   Other things to keep in mind

  • VAT responsibilities: charge the right amount of VAT, pay any VAT due to HMRC, submit VAT Returns and keep VAT records and a VAT account. Note that you can appoint an accountant (or agent) to submit your VAT Returns and deal with HMRC on your behalf. 

  • Apply for a registration "exemption" (optional): you can apply for a registration “exemption” if your taxable turnover goes over the threshold temporarily. Check this link to know how  you can ask for “exemption”.

  • Purchases made before registrationYou can backdate claims for VAT paid before registration, however there is a limit. From your date of registration, the time limit is 4 years of products you still have, or that were used to make other products you still have or 6 months of services. Note that you can only reclaim VAT on purchases for the business now registered for VAT and they must be related to your “business purpose” (they must relate to VAT taxable products or services that you supply). You should reclaim them on your first VAT Return and keep records of invoices and receipts, a description of the purchase and the date of the purchase, and information about how they relate to your business.

  • Keep your VAT registration details up to date: click here to find out how you can change your details and when should you tell HMRC about any changes.

  • Cancel your registration: if you are no longer eligible to be VAT registered, you must cancel your registration within 30 days, or you may be charged a penalty. You can cancel online or by post by filling and sending the form VAT7. Click here to find out what happens after you cancel your registration.  

  • Transfer your registration: transfer your registration through your  VAT online account  or by post by filling in a request: you may transfer a VAT registration from one business to another or if the status of your business changes- note that if you take over a company, the previous owner needs to cancel their VAT registration before you apply to transfer the VAT number, and if the status of your business changes you must cancel your existing VAT registration and re-register. Click here to find out what you need to do after asking for a transfer.