When do I have to start charging VAT?

ceeme

Hello!

I am self employed and this financial year I have averaged a gross income of aprox £7000 per month and a net of aprox £6500.

So, when do I have to start VAT? There is a certain amount you have to earn before you charge it isn't there...? If this is the case do I have to calculate the net or gross of what is paid to me??

Thanks so much

Evilm

Its total turnover that matters. And currently its £77k before they want to know. [STRIKE] You are fine.[/STRIKE]

http://www.hmrc.gov.uk/vat/start/register/

Edited as misread that - didn't realise OP was making that per month!

Thanks heretolearn!

heretolearn_2

No, you aren't necessarily fine because it's a rolling thing, not wait till you have had an income of over £77,000, and you haven't said how long you've been earning that much money each month. It depends how much you've earned in past 12 months. A monthly income of £7000 means an annual income of £84,000, so you may already be over the limit if you've been running for a while, you haven't given us enough information to say.If by 'financial year' you mean this tax year (but remember it's actually the last 12 months, not just since April, that the HMRC are interested in) then you'll be going over the limit this month. If you were earning that much before April, then you've already gone over the limit and should have registered. You don't just start charging VAT though, you have to register with the HMRC first. You can find the forms on line.

The rule is (quote from HMRC website): "If your turnover of VAT taxable goods and services supplied within the UK for the previous 12 months is more than the current registration threshold of £77,000, or you expect it to go over that figure in the next 30 days alone, you must register for VAT."

There may well be advantages to registering voluntarily before you have to, depending on your business.