If you’re running a business in the UK, understanding VAT (Value Added Tax) is essential. Whether you’re just starting out or already trading, knowing your obligations can help you stay compliant and avoid costly mistakes.
When Do You Need to Register for VAT?
Mandatory Registration:
You must register for VAT if your taxable turnover exceeds £90,000 over any rolling 12-month period. This is a legal requirement, and failing to register on time can result in penalties and interest charges.
Voluntary Registration:
Even if your turnover is below the threshold, you can choose to register voluntarily. This may benefit your business if you incur significant VAT on purchases or work primarily with VAT-registered clients who can reclaim VAT on your services.
What Are Your Responsibilities Once Registered?
Once you’re VAT-registered, you have several key obligations:
-
Submit VAT returns – Typically on a quarterly basis, showing the VAT you’ve charged and paid.
-
Keep digital records – In line with the Making Tax Digital (MTD) initiative, digital bookkeeping software is required for most businesses.
-
Charge VAT on sales – You must add VAT to your invoices and collect it from customers.
-
Pay VAT to HMRC – The difference between the VAT you’ve collected and the VAT you’ve paid on business expenses.
-
Reclaim VAT – You may reclaim VAT on qualifying business purchases and expenses.
Why Work With a Professional Accountant?
VAT can be complicated, especially as your business grows or if you’re dealing with international transactions. Mistakes in VAT returns can trigger audits, penalties, or even financial loss.
At Lucas Prestige Accountants, we provide reliable support to ensure your VAT obligations are handled correctly. Our services include:
-
VAT registration and consultation
-
Accurate and timely VAT return submissions
-
Full compliance with Making Tax Digital
-
Expert advice tailored to your business
Let us take care of your VAT so you can focus on running and growing your business with confidence.