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When do I need to become VAT registered?

01/04/11 1:03 PM

There are 2 main reasons for becoming VAT registered. One is required and the other is voluntary.

  1. 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 £73,000, or you expect it to go over that figure in the next 30 days alone, you must register for VAT.
  2. If you are selling less than £73,000 of goods / services in a year then you can register voluntarily. If you decide to register for VAT because you have a large number of suppliers who are VAT are registered and the majority of your customers are VAT registered then it may make sense even if you are under the threshold. The reason for this is you will see your costs fall (because you can claim back the VAT) and whilst you will have to charge VAT on your sales, that won’t matter because if you customers are VAT registered, they can claim back the VAT anyway.

You can see full details of when you have to register at: http://www.hmrc.gov.uk/vat/start/register/when-to-register.htm

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