How long have you been running your business? No matter how long you have been in business, as you grow and progress it is always worthwhile being aware of the VAT registration threshold. Find out what it could mean 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, or 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. (e.g. certain services received from overseas, even though you receive the supply.)
Talk to an accountant (ideally us – use the form here!) to talk about what you should include when monitoring your VAT turnover threshold. They’ll be able to advise you best with specific advice.
The positive news is that when you do register, you can claim input tax on goods backdated 4 years. This is 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. Find out more here.
If you are unsure whether you should register or not, contact us today on 01793 741 600 or email us. One of our experts on VAT will fill you in on the best way to get started, VAT schemes and rates to charge.