5 Key points for VAT registration

VAT registration

First of all, if you are reading this you are likely to be either looking to go in to business or your business is growing – congratulations! I have outlined below 5 key points you need to consider when registering for VAT in the UK:

You must register for VAT if your taxable turnover exceeds £85,000

This is either: a) in a historic 12 month period, b) if you expect a future 30 day period to include in excess of £85,000 of taxable turnover

For details on taxable turnover, visit this HMRC link.

You must register within 30 days of your business exceeding the threshold or risk penalties

Most businesses should do this online, unless there is special circumstance for not doing so (click here). To register online, click the following link.

Your VAT registration certificate will be sent in the post

This contains the VAT number you will need to quote on your invoices so make sure you update all paperwork to reflect this. You will be provided with the first period that the business will need to submit the quarterly VAT return, so ensure all invoices for this period have VAT charged.

If the invoice was raised prior to the VAT number arriving, you cannot include VAT on your invoice. However, you can mark up your fee to reflect the additional 20% charge (providing you have an understanding relationship with your customer).

If your taxable turnover exceeds the £85,000 threshold temporarily, you can potentially avoid registering for VAT if it drops below £83,000 for the next 12 months

To gain this exception you will need to write to HMRC who will confirm whether it is accepted.

You can register for VAT even if your taxable turnover is below £85,000

There are multiple benefits to this. Firstly, some businesses will only provide work to you if you are VAT registered. Secondly, if you expect strong growth in your business then it means you can register for VAT and not have to worry about implementing it further down the line. Thirdly, it can be financially beneficial in some circumstances when applying the Flat Rate Scheme.

VAT registration is very important to get right as you could face large VAT bills and possible penalties if you don’t do it properly. Every company and individual is different however so this is not considered to be advice. All users of the above information should seek tailored advice from a professional before deciding on the treatment of their business and tax affairs.


For more information on VAT, business tax and a “no obligations” consultation, contact me via the following link.

ASU Accountants is based in Cranfield, Bedfordshire, UK. We embrace technology so don’t worry if we’re not local to you – we actively use Skype and Cloud Accounting in our day to day business!