Complete Guide about VAT Registration

by Vidit Agarwal Marketing Director

VAT stands for Value Added Tax, Businesses need to pay VAT on purchases and charge customers VAT. A business owner needs to register the business for VAT with HM Revenue and Customs (HMRC), if the business Vat Taxable turnover is more than £85,000.

When you complete the business VAT registration, HMRC willsent a VAT registration certificate. This confirms:

Your business VAT number
Details about when to submit your first VAT Return and payment.
your ‘effective date of registration’ - is the date you asked to register for VAT with HMRC if it was voluntary or this depends on the date you went above the threshold amount.

You can register voluntarily if your turnover is less than £85,000, unless everything you sell is exempt. You’ll have certain responsibilities if you register for VAT.

If the business turnover is less than £85,000 you can register voluntarily for VAT with HMRC, unless everything you sell is exempt. A business owner hascertain responsibilities if you register for VAT.

You can reclaim the VAT you’ve paid on certain purchases made before you registered.

What are the VAT responsibilities for owners?

From your effective date of registration you must:

submit VAT Returns
charge the right amount of VAT
keep VAT records and a VAT account
pay any VAT due to HMRC

Most VAT registered businesses in the UK and earning over £85,000 must also follow the HMRC rules for ‘Making Tax Digital for VAT’.

How to register for VAT

The easiest way is to register online; you can register online for VAT at gov.uk’s VAT registration hub. An accountant or tax adviser can also register your business and deal with HMRC behalf of you.

While you wait for VAT Number

A business owner will not be allowed to charge or show VAT on your invoices until you get registered with VAT and also get your VAT number. However, you’ll still have to pay the VAT to HMRC for this period. Businessowners should increase the prices to allow for this and educate your customers why. Once you’ve got your VAT number you can then reissue the invoices showing the VAT.