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VAT registration

VAT – Value Added Tax is a tax that applies to most business transactions that involve the transfer of goods or services.

Once your business turnover reaches a certain level, you will have to register for VAT. This means that whenever you buy or sell anything in the course of your business, you will have to charge VAT on your sales, keep proper VAT records on your incoming and outgoing transactions and pay VAT to HM Revenue & Customs.

For a growing business, registration for VAT is compulsory when the annual turnover, calculated to the end of any month, exceeds the registration threshold.

VAT registration treshhold from 01/04/2018 is 85,000.00 and it will not change for the next 2 years. VAT deregistration limit is 83,000.00 or less.

Joining Flat Rate Scheme when for the next 12 months turnover will be 150,000.00 or less excluding VAT. You must leave the scheme when on anniversary your turnover is 230,000.00 or more including VAT.

It is important that the turnover is carefully monitored, so that registration can be effected promptly. A common mistake is either to wait until the end of a calendar quarter, or, worse, to wait until the annual income tax return. There is a further rule, sometimes missed, where registration is obligatory based on future turnover. This applies where a person expects that, in the next 30 days, his turnover will exceed the VAT threshold. The 30 day period can start at any time. This rule will affect a person where a large contract is under discussion with a customer. Under this rule, registration is required immediately, so that the large contract, for example, will be subject to VAT.


If you are registered for VAT, you must complete VAT Returns at regular intervals and send them to HMRC, with any VAT due for the period. The period covered by the return is called a tax period. These tax periods are set according to the needs of the business and Revenue Customs & Excise. You must fill in a return and account for VAT due in full at the correct time. You can fill in a paper return or do this online.

You must still complete the return even if you have not traded at all during the whole period covered by the return.

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