How long have you been running your business? No matter how long you have been in business, it is always worthwhile being aware of the VAT registration threshold and what that means for you and your business.

Should you be VAT registered?

If your business’s VAT taxable turnover exceeds the VAT Threshold of £85,000 (this has not been changed for 2018) in a rolling 12-month period, of if you are anticipating exceeding this threshold in the next 30 days – you MUST register for VAT – you need to do this within 30 days of exceeding the threshold.

However, it’s important to note that reaching the threshold is measured on a rolling 12-month period. You should ensure to keep up-to-date accounting records for the past 12 months, regardless of your year-end.

Although on a simple level, the taxable supplies refer to the sales of good or services. There are certain deemed ‘supplies’ that should be added to turnover.
One example is certain services received from overseas, even though you receive the supply.
Get in contact with your accountant at d&t to talk about what you should include when monitoring your VAT turnover threshold.

The positive news is that when you do register, you can claim input tax on goods backdated 4 years – as long as they have been and still are in use – and services up to 6 months. You will need supporting records.

HMRC do allow businesses to apply for exemptions in certain circumstances – i.e. if you have been awarded a large one-off contract that takes you over the Vat Threshold – but it is on-off in nature.

If you are unsure whether you should register or not, contact us today on 01793 741 600 or email us, where one of our experts on VAT will be able to give you more information on clarification of getting started, which VAT scheme to join and what rates to charge.

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