Tag: VAT
When must I register for VAT?
You must register when your taxable turnover for any rolling 12 month period goes over £90,000, or when you realise it will go over £90,000 in the next 30 days alone. You register within 30 days of the end of the month you crossed the line, and HMRC charges you VAT from your effective date of registration whether you have added it to your prices or not. Cited to GOV.UK, checked 20 October 2026.
Should I register for VAT voluntarily before I have to?
Maybe. Voluntary registration lets you reclaim the VAT on what you buy, and some businesses like the credibility of a VAT number. The price is real: you charge VAT to customers who may not be able to reclaim it, you keep digital records, and you file returns, usually quarterly, under Making Tax Digital. If your customers are mainly VAT-registered businesses, it is often worth it. If you sell to the public on thin margins, think hard. Cited to GOV.UK, checked 20 October 2026.
Is the VAT Flat Rate Scheme worth it for my business?
If your VAT turnover is £150,000 or less, the Flat Rate Scheme lets you pay HMRC a fixed percentage of your VAT-inclusive turnover instead of tracking VAT on every purchase. It suits service businesses with low costs. If your spending on goods is tiny, you are classed as a “limited cost business” and pay 16.5%, which usually kills the benefit. You must leave the scheme if your annual income goes over £230,000. Cited to GOV.UK, checked 20 October 2026.
How do I actually submit a VAT return under Making Tax Digital?
Every VAT-registered business must keep its VAT records digitally and file through Making Tax Digital-compatible software. Paper forms and typing numbers into the old HMRC portal are gone. Most businesses file quarterly, and the deadline for both the return and the payment is one calendar month and 7 days after the end of the VAT period. Cited to GOV.UK, checked 20 October 2026.
Can I reclaim VAT on things I bought before I registered?
Yes, within limits. You can reclaim VAT on goods bought up to 4 years before you registered, as long as you still have them (or still have goods they were used to make), and on services bought up to 6 months before. The purchases must relate to the business you have now registered and to taxable supplies. You make the claim on your first VAT return, so keep the invoices. Cited to GOV.UK, checked 20 October 2026.