UK Accounting Glossary
Refers to the registration for value added tax (VAT) by a taxable person whose taxable turnover doesn’t exceed the VAT registration threshold.
The VAT registration and de-registration thresholds is now fixed until the 1st April 2020.
The taxable turnover threshold which determines whether a person must be registered for VAT is currently £85,000.
You can register voluntarily if your business turnover is below £85,000.
You must pay HMRC any VAT you owe from the date they register you.
Yes, if you make all or the overwhelming majority of your sales to VAT–registered businesses, because you will be able to reclaim VAT on any business expenses you incur.
‘Voluntary registration‘ is the term given to becoming VAT registered even though your turnover is below the registration threshold.
You may also decide to register for VAT even if you don’t expect to reach the threshold. Most contractors who run limited companies are registered for VAT.
Not only does it give a professional impression to be VAT registered, but it will also enable you to reclaim any VAT you incur (such as computer equipment).