The compulsory registration requirements for VAT is either when:
a) your taxable supplies exceed £83,000 (£85,000 in 17/18 as shared in Hammonds Spring budget last week); or
b) there are reasonable grounds to believe that your taxable supplies in the next 30 days WILL exceed £83,000 (for example of you’ve just secured a large contract).
If you don’t register then the VAT man has the power to register you from the date you “ought” to have registered and assume that all the sales you had made in that period was VAT INCLUSIVE and the VAT is payable to HMRC.
Once you register you’ll be sent a VAT registration certificate. This confirms:
- your VAT number
- when to submit your first VAT Return and payment
- your ‘effective date of registration’ – this is the date you went over the threshold, or the date you asked to register if it was voluntary
You can register voluntarily if your turnover is less than £83,000. You might choose to do this if for example, you are incurring a lot of input VAT that you’d like to reclaim; however you should consider this carefully as you’ll have certain responsibilities if you register for VAT:
Your VAT responsibilities
From the effective date of registration you must:
- charge the right amount of VAT
- pay any VAT due to HMRC
- submit VAT Returns
- keep VAT records and a VAT account
You can also reclaim the VAT you’ve paid on certain purchases made before you registered.
While you wait for your registration to be completed…
You can’t charge or show VAT on your invoices until you get your VAT number. However, you’ll still have to pay the VAT to HMRC for this period.
You should increase your prices to allow for this and tell your customers why. Once you’ve got your VAT number you can then reissue the invoices showing the VAT.
Call LeeP Accountants in Huntingdon & Peterborough for guidance on VAT. We have fixed price VAT registration packages and can do your quarterly VAT returns. Call 01733 699033 or email [email protected]