VAT Registration: a beginner's guide Article Image

VAT Registration: a beginner's guide

What is it? How do I register? What If I can’t register online? What if my registration is late? Can I cancel my registration? These are all questions accountants get asked by their clients about VAT Registration. We help answer them with our handy guide.

What is it?

In simple terms, you must register for VAT with HM Revenue and Customs (HMRC) if your business’ taxable turnover is more than the threshold amount which is £83,000. When you register, you’ll be sent a VAT registration certificate which confirms:

  • Your VAT number – which is something every VAT registered company has, it helps identify your business.
  • When to submit your first VAT return and payment.
  • Your effective date of registration – this date can mean the date that you asked to register if it was voluntary or when your business’ turnover went over the £83,000 threshold.

How do I register?

The majority of businesses can register online via the HMRC website. This does also include:

  • Partnerships
  • A group of companies registering under one VAT number.

By completing the registration process, you’ll register for VAT and you will create an online VAT account. It can also be known as the government gateway account. You will need this to submit your VAT returns to HMRC so it is crucial that you keep your login details, i.e. username and password safe so that you don’t forget them.

What If I can’t register online?

Occasionally, there will be some barriers for business’, i.e. preventing them from registering online. This means that you will have to register by post. You’ll need to do this if:

  • You want to apply for a registration exception.
  • You’re an EU business distance selling to the UK.
  • You import goods from another EU country.
  • You’re joining the Agricultural Flat Rate Scheme.
  • You’re registering the divisions or business units of a body corporate under separate VAT numbers.
  • You’re disposing of assets on which 8th or 13th Directive refunds have been claimed.

What if my registration is late?

You must register within 30 days of your business turnover exceeding the threshold. If you do register late, you must pay what you owe from when you should have registered. So, if you want to avoid these charges and penalties, it is vital that you register within those 30 days. However, you can get an exception from HMRC if your taxable turnover goes over the threshold temporarily. You can do this by writing to HMRC with evidence showing why you believe your turnover won’t go over the de-registration threshold of £81,000 in the next 12 months. HMRC will either write to you confirming you get an exemption, if not; they’ll register you for VAT.

Can I cancel my registration?

You must cancel your registration if you’re no longer eligible to be VAT registered. For example:

  • You stop trading or making VAT taxable supplies.
  • You join a VAT group.
  • If your turnover goes below the de-registration threshold of £81,000.

You can apply to cancel your VAT registration by:

  • The online HMRC service which can be found through your VAT online account.
  • By post – using the VAT7.

Again, you must do this within 30 days of your reason for cancelling the registration or you may be charged a penalty. It usually takes HMRC 3 weeks to confirm your de-registration. You must keep your VAT records for 6 years.

Need help with your VAT?

If you want to find out what services we offer, including completing your VAT returns for you, please do get in touch. If you have any questions about VAT Registration, we would love to help. 

Get in touch for expert advice and solutions for you or your business.

Call us on: 01278 445151