Should The Business Register for VAT?

You should decide whether it is in your best interests to register for VAT from the start date of your new business, or at some future date, or not at all if your trade is outside the scope of VAT.

This decision will affect both profitability and cash flow of your new business.

You must register if:

• Your business services or sales are taxable; and
• Your turnover (sales) exceeds the statutory registration limit.

Registration is optional if:

• Your turnover is below the statutory registration limit.

It can be advantageous for you to register voluntarily if:

• The nature of your trade means that your costs or purchases include VAT, and most of your customers are VAT registered and can therefore claim back the VAT.
• Your supplies are mainly zero rated for VAT purposes.

It may be better to wait until you have to register if neither of the above apply

DO NOT add VAT to your sales invoices UNLESS you are registered – this is a criminal offence!

Do not delay if you do need to register otherwise you may find yourself paying needless penalties and interest charges. You will also have to pay over VAT you have not charged your customers and that you cannot recover.