Accounts & Bookkeeping

Tax Tip: Should You Be VAT Registered?

Did you know that you don’t have to meet the VAT Threshold (£85,000 per annum) to register? You can choose to register for VAT even if you’re not earning that amount – and if the majority of your customers are registered, and you’re incurring VAT on your supplies – it may be beneficial for your business to register as well; this will allow you to recover the tax paid on the supplies and charge VAT on your invoices.

If you’re earning £1.35m or less on your VAT-exclusive turnover, then you can use the VAT Cash Accounting scheme, which you’ll be eligible to continue using until your taxable turnover reaches £1.6m or more per annum. This scheme means you don’t have to pay VAT to HMRC on unpaid invoices, but it also means that you can’t claim back VAT on expenses incurred that haven’t been paid yet.

VAT is a highly complex system, and the scheme can be hard to handle if you’re new to it (or even if you’ve been with it awhile!) – and with the legal obligations, notifications, and record keeping that comes with it, being VAT registered can be a daunting prospect.

But you don’t need to worry! Get in touch with us today, and our team can help you determine what your VAT status should be (whether you should be registered, or if it would be beneficial to do so), and we can help you manage your VAT obligations once you are on the scheme.

Don’t delay, talk to us today – and we’ll help make tax less taxing for you!

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