VAT registration and when it should happen has become quite a hot topic for a number of my clients, so I thought it a good idea to share some of the basic things to be aware of, especially as a growing business.

The first rule to be aware of is when you must register. If your turnover, on a rolling 12 month basis exceeds £85,000, or is going to exceed this amount in the next 30 days, you must register. A common misunderstanding is that the 12 month timeframe resets at your year end, it doesn’t I’m afraid. It is always the latest 12 months on a rolling basis. Once you realise you’re over, the window to register is short, at 30 days. If you miss this you will be penalised by HMRC so it’s a good idea to keep a close eye on your turnover.

Any business can register for VAT, you don’t have to be over the £85,000 limit. There may be good reason to do so, i.e. public perception, or you may operate in a trade that would benefit from VAT re-claims, i.e. a butcher. There are also different VAT schemes to be aware of, for example, the Flat Rate Scheme, or the Margin Scheme which may suit your business better.

Once you are registered then record keeping can become slightly more onerous so a cloud based bookkeeping system is probably the way to go, which in most cases is mandatory in any event, which we can also help you with. VAT can be a very complex area of tax, so if you are considering becoming VAT registered for the first time I would certainly suggest a little hand holding (and possibly a hug!)

Feel free to contact us at Ivybridge Accountants 01752 895648 or email me on simonjilks@ivybridgeaccountants.co.uk