Posted February 14, 2020
The benefits of being VAT registered
Joanne Whiteside, explores the benefits of being VAT registered
The VAT registration threshold is currently 85,000 pounds, so if your turn over goes over that in the previous 12 months, looking at the 12 months up to the end of the previous month, not what your accounts might say for the previous year, you would need to register the VAT. However, you may want to consider registering even if you haven’t reached the VAT threshold in certain circumstances and it depends on who your customers are.
If your customers are mostly VAT registered businesses who’ll be able to reclaim VAT on your invoices, then depending on whether you feel it’s worth reclaiming the VAT on your expenses and whether it’s worth the extra admin, you can register for VAT, as your customer will be able to reclaim the VAT, so they’re no worse off.
If you’re supplying to the general public as a business to consumer supply, unless you’re providing zero-rated supplies such as being a milkman it would not be advisable to register VAT as you’ll be having to charge VAT to all your customers. But before you do register the VAT check that you don’t provide exempt supplies because there are certain supplies such as financial services including insurance brokers, opticians or chiropractic services or medical services are exempt and you can’t register for VAT if you provide exempt supplies.
If you’re considering the benefits of being VAT regisrered or would like to know more information, please feel free to contact us today.