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A guide to VAT for small businesses



Are you a small business wondering whether you should be registering for VAT?


How do you even know when you NEED to?


Here’s some help for you…


VAT stands for Value Added Tax, and this type of tax is relative to the consumption of goods and services.


If you are in the UK, you need to register your business for VAT, if your turnover exceeds £85,000.


How can I register?


Most businesses can register online - including partnerships and a group of companies registering under one VAT number.


By doing this you’ll register for VAT and create a VAT online account (sometimes known as a ‘Government Gateway account’). You need this to submit your VAT Returns to HM Revenue and Customs (HMRC).


This is how you can work out your taxable turnover…


Total value of everything you sell, that is not exempt - like lottery sales, postage stamps etc.


Here’s what you will need when you register:

  • VAT number

  • First VAT return (and payment) details


  • Effective date of VAT registration


Why do you need to register for VAT as a business?


It is a legal obligation to register for VAT if your turnover is above £85,000. Registering for VAT lets you reclaim VAT on your purchases. If you pay more VAT than you collect from customers, reclaiming VAT makes up the difference.


Registering for VAT also means you are ready for growth!


However, there are always negatives, as with everything…


VAT registration means more paperwork, and sometimes you’ll pay more to HMRC (if you collect more VAT from customers than you pay out). We can help you out with the specifics!


What is a VAT certificate?


A VAT certificate in the UK is a document that HMRC will send you to prove that your business is registered for VAT.


It shows your:

  • VAT number

  • The date you need to submit your first VAT return and pay your bill

  • ‘Effective date of registration’.

Do you need help with registering for your first VAT return?


Send us a message or book a call in with us, so we can help you with your VAT return today.



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