Before I get started answering the question “when should I become VAT Registered?” I just want to make it clear that this blog isn’t a list of pro’s and con’s for going VAT registered or how to do it etc (Click here if that’s what you’re looking for!). This blog is quite simply a quick ‘Tips on Tax’ which will explain the compulsory time for any individual or business to become VAT Registered.
So with that said, it’s very, very simple!
If your VAT taxable turnover is (or is realistically forecast to be) over £82,000 per year then you legally must become VAT registered.
However a problem many people have, especially those new to business, is what the term ‘VAT taxable turnover’ actually means! Let me explain:
VAT taxable turnover simply means all the money you make from products or services which aren’t VAT exempt. So what does this turnover need to include?
- any products or goods you hired or loaned to customers
- business products/goods used for personal reasons
- products or goods you part-exchanged, bartered for or gave as gifts
- services that you had to ‘reverse charge’ which you received from businesses in other countries
- any building work that cost more than £100,000 for your business
You also need to include any zero-rated items – you only exclude VAT-exempt sales, goods or services you supply outside of the UK.
But what are ‘VAT exempt’ items? Well these are simply sales, goods and services which you don’t have to include in your turnover each year – the list of VAT exempt items is far to long to include in this short blog so if you want to find out what these are then simply visit – https://www.gov.uk/guidance/rates-of-vat-on-different-goods-and-services – and you’ll be able to find out what you can leave off of your turnover amount each year.
I hope that helps and if you want anymore information just contact me at firstname.lastname@example.org
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