Are you a business owner who has seen your income/turnover rise above the £ 85,000 VAT threshold?

Or

Do you think that turnover will exceed £ 85,000 within these next thirty days?

If you have answered yes to either of these questions, you need to be clear on the nuts and bolts of registering for VAT.

It isn’t easy to determine the precise rules and regulations for businesses that need to be registered for VAT, particularly for first-time entrepreneurs.

Who is eligible to register for VAT? (and When?)

The VAT threshold currently stands at £ 85,000.

If your company has exceeded the VAT-taxable limit of £ 85,000 within the last 12 months or is expected to do so during the tax year currently in effect, you need to register for VAT.

The date you must be registered for VAT is up to the date on which you are likely to or have already reached the threshold.

Companies who fail to declare VAT as their revenue grows above the threshold can be hit with a substantial fine from HMRC.

How do I determine my revenue?

HM Revenue & Customs (HMRC) defines turnover as sales with no VAT. It is assumed that the company is already registered for VAT since the VAT element isn’t money that the business can keep.

If you’re at this point you may be thinking about how you will calculate your revenue.

The turnover is based on the total value of all items your business sells and isn’t tax-free, such as:

• Goods that are lent or hired to customers
• Zero-rated products
•  Business goods used for personal use
• Part-exchanged or traded products
• Things given as gifts

How do I How to register for VAT in 2022?

The process of registering for VAT is fairly simple.

The two primary methods to register for VAT are:

• Sign up online using a Government Gateway ID
• Print out a VAT1 form

You’ll require the following items on be on hand at the time of registration:

• Business contact details
• Information on your turnover and the nature of your business
• Bank account details
• Unique Tax Reference (UTR) number

Which VAT Scheme should I select?

VAT Schemes are designed to provide companies a little breathing in the process of paying VAT. These schemes also take care of the different situations that are unique for each company with respect to turnover. This usually aligns with the specifics of the company.

There are a variety of categories of VAT that you must be aware of prior to registering for VAT.

For instance, with the Annual Accounting VAT Scheme, you’ll make advance payments on VAT towards the current year’s VAT based on your previous return or an estimation.

If you’re a business owner newly-established business proprietor, understanding the amount you must pay in VAT, as well as the differences between the different VAT schemes is crucial.

If you need advice on the different VAT schemes or need assistance registering for VAT, contact us today.