Everything you need to know about VAT

If your annual taxable income exceeds £90,000, you should register for VAT, referred to as compulsory registration. In many cases, you will need to reach the threshold to make the payment.

If you register before reaching the cash flow threshold, it is known as voluntary registration. It will, however, play an important role in boosting cash flow. You can also file for claims based on the input. However, you must refrain from filing if the customers do not have VAT. It will harm your business. As a result, the customers may need to pay significantly more.

You should consider registering for VAT if your business meets the following conditions:

• Your business is based out of the UK.
• You are based out of the UK.
• You are supplying goods and services across the UK.

You must go through the non-established-taxable-persons guidelines to make the right choice. You must pay the VAT to the HMRC within the date they owe you money.

When registering your business for VAT, you must consider different factors. You should check the VAT threshold and register with HMRC accordingly. You might as well hire an agent or account who will submit the VAT return on behalf of the company.

While you can register easily online, you might as well choose to do it via post. Given below are the steps you need to follow to register for VAT:

• Visit the tax registration website of HMRC so that you can start the process of registering for VAT.
• If you are registered with HMRC, you will have a Government Gateway Account. You should click on the I have an account login option. You should click on the Create an account option if you do not have a Government Gateway account.
• Enter the Government Gateway ID and password. You will need to scroll to the bottom of the account to find details about the scheme, duty and tax.
• Since you are registering for VAT, click on the VAT services option. There are different options available and choose from one. You should click on Continue.
• In the next step, click on the VAT option and continue with the registration process.

If you cannot register for VAT online, you can apply in paper format. The HMRC website has a VAT1 form available. Fill and post it to the HMRC office. They will take the process ahead for the registration of VAT.

Conclusion

There is a specific deadline for the payment of VAT. Businesses should consider registering for VAT depending on the demands of the company. You must file the VAT return in time to opt for a claim or pay it back. Make sure to log in to your account to send the VAT return. The concept of VAT can be slightly confusing, which is why you will need the help of professionals.