What to consider when registering for VAT?
Currently the VAT threshold is £85,000 this is based on a rolling 12 months (not the tax year or your financial year). If you think you will reach registration in the next month you must register.
Do consider which scheme is right for you – the most common being Cash, Standard, Flat Rate (although this is less attractive).
With your first VAT return you can go back 6 months on services you still use and 4 years on capital equipment you still own.
Keep your receipts!
Whilst waiting for the VAT number to be issued, if you need to invoice a client – add to your invoice VAT NUMBER PENDING and then include the VAT amount within the total (do not split out Net / VAT / Gross). Once your VAT number comes through you can reissue your invoice with the VAT number and the Net / Vat / Gross split out.
VAT is a complicated area of tax and must be done correctly and there many different rules to consider and adhere to so always best to seek advice from a qualified accountant to help you make sure your specific circumstances are met correctly.
If you are in this position or concerned about VAT – Do not hesitate to contact us 01473 558866.