Understanding how VAT works is essential for any business. The more you know about VAT, the easier it will be to understand how it affects your business. Take a look at everything you need to know below.
Who needs to register for VAT?
If the taxable turnover of your business has reached £85,000 or above, it’s time to register for VAT. If your turnover has been at £85,000 for over twelve months and you haven’t informed HMRC, you could be liable to pay a significant fine.
Can you pay VAT voluntarily?
If your turnover is below £85,000, you can still choose to pay VAT voluntarily. It’s worth talking to Cheltenham accountants about this if you want advice on the benefits of paying voluntary VAT.
Benefits of paying voluntary VAT
When you pay VAT on things you need for your business, like office supplies or furniture, you can claim this money back when you fill in your VAT return. This way, the money you get back can be poured back into your business. In addition, if you aren’t VAT registered, your clients will be able to easily find out that you aren’t making over £85,000 a year yet.
Registering For VAT
Registering for VAT can be done online but you don’t want to make any mistakes on your registration form. Asking for advice from Cheltenham accountants will save you from having to amend details after you’ve registered your business.
What You’ll Need
To register your business for VAT you’ll need your business contact details and your business bank account details. Why you need a business bank account is explained here: You should also have accurate details of your business turnover and the nature of your business.
Do I have to register online?
Most businesses register online because it’s convenient. However, there are instances where this can be a problem, such as if you’re having issues with your Government Gateway ID. In this case, you can use a VAT1 form to register but the registration process could take longer.
Do not hesitate to ask for financial advice if you find this process daunting.
