Do I Need to Register for VAT?
VAT is one of those areas of running a business that often gets forgotten / missed. Many people think that it is OK to wait until your accountant looks at your year-end figures and that they will then let you know if there is anything you need to be aware of. This is how many people get caught out!
The current VAT registration limit is £85,000. Now this is not based on your financial year, this is based on a 12 month rolling period.
E.g. You start your business in January 2018. Your first 12 months will be to 31 December 2018.
Then you need to take 01 February 2018 to 31 January 2019
Then you take 01 March 2018 to 28 February 2019
You must register for VAT if:-
– You expect your turnover to exceed £85,000 in the next 30 day period, OR,
– Your business had a turnover of more than £85,000 over the last 12 months
It is really important to monitor your turnover on a monthly basis, so that you register in time.
What Happens if I Register Late?
If you realise too late that you need to register then you may receive penalties and interest charges from HMRC.
Additionally, you will need to take the VAT out of the gross receipts you made, rather than adding VAT on to invoices when you quote for the work.
I’m Not Sure if I Need to Register for VAT
If you’re not sure if you need to register please contact us and we can help. Don’t leave it too late though, it can be very tricky to unravel if you register late.