Small company registering for VAT

seanlloydbooth

Hi,

Our company sells Apps/Games through Apple & Android, and we're about to start selling virtual goods through our games on Facebook.

However, setting up a company that can receive payments on Facebook requires a VAT number, and we haven't signed up for VAT (Neither Apple nor Android required it).

Our company is still somewhat new, and last year we only made around £1000, far below the VAT threshold. So we'd be signing up for VAT not because we're legally required, but because Facebook requires it.

What I'm wondering is:

• Will we have to pay VAT even if we earn less than the current £72,000 threshold?
• Will we have to do annual VAT returns even if we are below said threshold?

I'm just wondering if it's worth doing it until we're legally required to!

System

If you register for VAT then the level of your income is immaterial. You have to follow the rules I.E. VAT returns, charging VAT on VATable products, paying VAT to HMRC etc.

ETA
I haven't looked at the list but you may be able to register under the Flat Rate scheme. This simplifies your VAT quite a bit. A list of trade sectors and their rates are here

ricky9

I cold be wrong but VAT threshold is turnover not profit

System

ricky9 wrote: »

I cold be wrong but VAT threshold is turnover not profit

Correct, it is turnover or more precisely taxable turnover (total of sales and certain other supplies you make that are subject to VAT, including supplies that are zero-rated, not VAT exempt sales)

chalkie99

The threshold for the last year was actually £79,000 and from April 1 2014 this increases to £81,000.

With respect to VAT registration for Facebook you should refer to :
https://www.facebook.com/help/334256633321462/

In particular, the following lines:

What if I don’t have my VAT registration number or my business is not required to register for VAT?
If you do not have or need a VAT registration number, you should leave the VAT registration section blank and proceed to the next step in the process (although you will still need to confirm whether you are purchasing Facebook Ads for business purposes and provide your business address).

So Facebook does not require you to register, it merely asks for the number if you are.

[Deleted User]

seanlloydbooth wrote: »

Hi,

Our company sells Apps/Games through Apple & Android, and we're about to start selling virtual goods through our games on Facebook.

However, setting up a company that can receive payments on Facebook requires a VAT number, and we haven't signed up for VAT (Neither Apple nor Android required it).

Our company is still somewhat new, and last year we only made around £1000, far below the VAT threshold. So we'd be signing up for VAT not because we're legally required, but because Facebook requires it.



What I'm wondering is:

• Will we have to pay VAT even if we earn less than the current £72,000 threshold?
• Will we have to do annual VAT returns even if we are below said threshold?

I'm just wondering if it's worth doing it until we're legally required to!

Facebook ... again! :mad:

The threshold at which you must register for VAT is actually currently £79k p.a.

You can voluntarily register below this level.

If you are registered for VAT, yes you must complete the returns whatever your turnover.

Registered VAT users may (but are no obliged to) de-regsiter for VAT if they have turnover of £77k p.a. or less