You don’t usually need to register for VAT until your turnover reaches a certain limit in any 12 months, or you expect it to do so. This limit – the “VAT threshold” – is currently £85,000. You can register voluntarily even if your turnover is below the statutory registration threshold.
A VAT return is a form to be filed with HMRC which shows how much VAT you are due to pay. The VAT return amount is the amount of VAT reclaimable on purchases you have made.
VAT registration can add credibility to your business and can also be advantageous if any of the following situations apply, if:
However, if none of the above apply it may be better to delay the registration until you have to. Avoid delay if you do need to register, otherwise you will incur penalties and interest charges, as well as having to account and pay over the VAT due from the time that you should have been registered.
HMRC have recognised that for small businesses having to pay VAT added to sales invoices which have still not been paid by your customers can cause cash flow problems. They have now created a number of “Special Schemes” to alleviate some of the cash flow problems that a small business may face, especially when they are starting up. We can help to identify which of these schemes would be more beneficial to your business.
At Kidwells our professionals can complete your VAT returns in a timely manner depending on your business size. If you choose to use XERO software then this will make logging VAT a lot easier and save you time. However, if you choose to leave it to us then this is a service we can provide.
Further VAT information can be found at the following link: https://www.gov.uk/topic/business-tax/vat
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