Tax FAQ
VAT Registration
Do I have to register for VAT and, if so, when do I have to
register?
The basic answer is "Yes". A business carrying out VATable
transactions in the UK has to register for VAT. Businesses which
only make exempt transactions (for example finance, insurance,
education, health, some sports or social care), cannot register for
VAT.
A business must register for VAT if:
- at the end of any month it has exceeded the registration limit
(currently £67,000) in the previous twelve months; or
- at any time the business believes it will make taxable
transactions with a value of more than the registration limit in
the following 30 days.
A business can register voluntarily even if it has not exceeded
the registration limit, since a business cannot recover the VAT it
incurs unless it is registered for VAT.
The effective date of registration depends on how the business
exceeds the registration limit. Under the 12-month rule above, the
business must register on the first day of the second month
following the date on which the limit is exceeded. For example if a
business exceeds the limit in the 12 months to 30 June, the
registration date would be 1 August. Under the 30-day rule, a
business must register from the date it discovers it will breach
the limit in the following 30 days.
If a business wants to register voluntarily, it can register at
any time, but Customs will not normally back-date a voluntary
application.
Please read legal information.