VAT registered in UK

Easymoney

Hi

I would like to (dream of) start a business one day, Is it true that you need an annual turnover of £60k for VAT registration?

Thanks

JonathanA

The threshold is somewhere in that region £66k I think rings a bell. However, you can apply to register voluntarily even if your turnover isn't going to hit that threshold. You may find this hard to believe, but when we set our business up and registered voluntarily, we spoke at length to the revenue & customs staff and they were incredibly helpful.

vivatifosi

Hi Easymoney,

Like JonathanA I did a voluntary registration for VAT. If you are selling business to business, there may be benefits to doing so, in that you can claim a portion of the VAT back for your business. If you run a small business in something business to consumer, then people will not want to pay the extra 17.5% and may actively seek out people who don't charge VAT or will charge the same, hence earning less.

If you do decide to VAT register, there's more than one way for a small business to go about it. You can pay a percentage flat fee of your VAT to Customs and Excise, normally assessed by the type of business that you are in, or claim the VAT back on expenses. In my case, my set up costs in the first year were relatively high as a proportion of my earnings, so it made sense to claim back VAT on my expenses in the first year, then switch to the flat fee thereafter when outgoings were lower.

As Jonathan says, the staff at revenue and customs are extremely helpful. The form is easy to do, though VAT can get more complicated if you sell lots of small things, or goods or services overseas.

Good luck with the new business!

JonathanA

If you mean registering the business for VAT, then Customs & Revenue would be the place to start. If you mean registering as a limited company, then companies house would be a good starting point for information. You can of course run the company as a sole trader, in which case you just need to notify the inland revenue so that they can send you a tax return each year for you to complete

I've just noticed you're in Northern Ireland. I'm not sure what the NI equivalent is, but try www.businesslink.gov.uk for information and advice that may be helpful to you - I'm sure there must be something similar that you can access. Good luck!