Not every limited company needs to register for VAT. It largely depends on the turnover of the company. Some business owners choose to register voluntarily because of the potential benefits. So, is VAT registration really worth it? Who has to register? And, most importantly, what are the formalities?
When must a Limited Company register for VAT?
VAT registration is compulsory if
- Your company’s turnover in the last 12 months exceeds the VAT threshold of £85,000,
- you expect your turnover to exceed this threshold in the next 30 days.
In addition, there is another situation where VAT registration is required even if your turnover is below the threshold. This is the case if you meet all of the following conditions:
- you live outside the UK,
- your Limited Company is based outside the UK,
- You supply goods or services to the UK or expect to do so within the next 30 days.
Voluntary VAT registration—what are the benefits?
You can also voluntarily register your limited company for VAT. Many business owners choose to do this because of the benefits it brings. Registering for VAT means that
- your company appears more professional and credible,
- You can reclaim VAT on purchases,
- You can reclaim VAT on business expenses,
- in some cases, you can join the flat rate VAT scheme, which may result in a lower tax rate.
How to register a Limited Company for VAT?
If you need or want to register your LTD company for VAT, there are several ways to do so.
The first option is to register your limited company for VAT online. Many business owners choose this option as the process is convenient and straightforward. This process also creates an online VAT account (Government Gateway account).
Alternatively, you can appoint an agent to register on your behalf. This person can submit the VAT return to HMRC on your behalf. This is a good option because an experienced accountant can act as your agent and ensure that all formalities are completed correctly. This way you can be sure that your VAT registration and returns are submitted correctly.
What happens after VAT registration for an LTD company?
Once you’ve registered your Limited Company for VAT, you’ll receive a VAT registration certificate.
This will also bring with it new responsibilities, such as
- Include your VAT number on all invoices issued,
- charge VAT (usually 20%)
- Maintain VAT records and a VAT account
- Calculate and submit quarterly VAT returns
- paying any VAT due to HMRC.
Don’t register for VAT alone – get professional help!
Not sure if VAT registration is right for your business? Wondering which VAT scheme to choose? Or maybe you’re not sure how to deal with all the formalities associated with VAT registration?
We understand that the process can be confusing and stressful. But you don’t have to do it alone – we can do it all for you. For years we have been assisting LTD companies with both VAT registration and the ongoing management of their VAT obligations.
Let us handle the formalities so you can focus on running your business.
