As your business grows (and your taxable supply reaches £85,000), you’ll need to register for VAT. You can also reclaim the VAT you’ve paid on some purchases made before you registered.
It’s easier than it sounds and we’ve made it even simpler by giving you everything you need to get started.
Before You Start...
Do you have MTD-compliant software for managing your VAT records? You need to provide details like your turnover, business activity and bank details. You can calculate these and keep track of them by using a bookkeeping app.
This is the first step of registration because it’s the first question HMRC will ask when you do. It’s essential you start keeping track now to make it easier when you do eventually have to register.
How to Register
You must have registered with HMRC for the digital VAT service before your return deadline. It’s important to note your business isn’t enrolled automatically, even though MTD for VAT is now mandatory.
The registration process involves logging in to the Government Gateway account associated with your business. Most businesses can register online - including partnerships and a group of companies registering under one VAT number. It’s user-friendly and walks you through the process step-by-step.
Your registration date is defined as your ‘effective date of registration’, and you’ll have to pay HMRC any VAT due from this specified date.
Alternatively, you can front the c ost of an accountant (or agent) to submit your VAT Returns and deal with HMRC on your behalf.However, for small businesses just getting off the ground, it’s more feasible to take matters into your own hands. As mentioned before, it’s a lot easier when using an app and you’ll save yourself some money to put back into the business.
Getting Your VAT Registration Certificate
After registering, you should expect to get a VAT registration certificate within 30 working days. Although, it can take longer in some circumstances. This confirms:
- Your VAT number.
- When to submit your first VAT Return and payment.
- Your ‘effective date of registration’.
While You Wait
You can’t charge or show VAT on your invoices until you get your VAT number. However, you’ll still have to pay the VAT to HMRC for this period.
You should increase your prices to allow for this and communicate to your customers why. Once you have your VAT number, you can then reissue the invoices showing the VAT.
Your VAT responsibilities from your ‘effective date of registration’ include:
- Charging the right amount of VAT.
- Paying any VAT due to HMRC.
- Submitting VAT Returns.
- Keeping accurate VAT records and a VAT account.
As always, you can keep up-to-date with the latest VAT information over at the official government website.
Registering for VAT is a key milestone in the life of your business. There’s so much more to learn and leverage for your small business. Legalities, marketing, finance and HR - these will also need consideration so you can thrive. We’ve got just the resources you need.
Register and Get Started With Your Small Business Venture
Excited, eager and maybe even a little bit scared - three things you feel when you decide to take the plunge and start your own business. There is so much to organise and tasks to perform before you can enjoy the benefits of being independent.
To help you hit the ground running, we’ve put together everything a small business owner needs to do. From marketing resources that spread the word about your business to bookkeeping templates that make organising your finances more manageable, all these resources are in one place and ready to use.
Grab your copy below.