Sail smoothly towards compliance with a reliable online VAT registration service

VAT (value-added tax) is a tax charged on most goods and services at every stage of production and distribution from manufacturer to retailer. Since it is a consumption tax, the end customer pays the VAT, while businesses in the supply chain collect and remit the tax to the HMRC (Her Majesty’s Revenue and Customs). Enrol for VAT as soon as you supply any goods or services to the UK or your business passes £85,000 in turnover.

Every business registered for VAT gets a unique identification number to identify the business and track its activities within the context of VAT. In the UK, the VAT number starts with the letters ‘GB’ (country code) followed by nine digits.

You must register for VAT if your business taxable turnover exceeds the threshold of £85,000 in 12 months or if you anticipate meeting this threshold within 30 days. However, businesses not meeting the threshold enjoy an ‘exception’ from the standard VAT rules. A VAT number UK is necessary for collecting and remitting the appropriate consumption tax to the HMRC.

The turnover VAT threshold for registration is the taxable turnover at which a business must register for tax in the UK. The threshold is calculated based on all taxable supplies a business makes, including selling company assets that have appreciated in value and not just sales of goods or services.

You can apply for your EORI number as part of the registration process (VAT) and get the number a few days after receiving the VAT number.

• Name
• Date of birth
• National Insurance (NI) number
• ID, such as their passport or driving license
• Details of turnover and nature of business
• Bank account details (or a reason if no bank account details are provided)
• Unique Tax Reference (UTR) number

If your business is a limited company, you must provide a Company Registration Number and a Corporation Tax Unique Taxpayer Reference (UTR) to complete the VAT registration process. Individuals and partnerships do not need a self-assessment UTR to register for VAT, but if they do have one, they must supply it.

The VAT registration threshold until March 2024 is £85,000. Businesses with a lower turnover may still voluntarily register for VAT online to enjoy benefits such as reclaiming VAT on expenses.

We help a wide variety of companies successfully obtain their VAT number. Some of the businesses we support include–

• Wholesalers and distributors of goods to other businesses or retailers;
• Property developers or landlords renting or selling properties;
• Travel agents with package holidays and tours for customers;
• Corporate bodies including limited liability companies;
• Importers and exporters of goods to and from the UK;
• Charities, Trusts and non-profits organisations;
• Caterers providing food and drink to clients;
• Freelancers, consultants and contractors;
• Online retails selling goods to the UK;
• Unincorporated associations;
• General partnerships; and
• SMEs and sole traders;
• Registered societies.

And many others.

If your small business has a turnover (total sales and not profit) of more than the current VAT threshold of £85,000 per year, you must register and start charging VAT on your taxable supplies. You may opt for voluntary VAT registration if your annual turnover is below the threshold. However, remember that even if you are not registered, you may still need to pay for VAT (input VAT) on goods or services you purchase from VAT-registered companies.

No. You cannot run two businesses to avoid VAT taxes. HMRC investigates businesses suspected of splitting operations into multiple entities to avoid tax. If suspected, you expose yourself and your business to severe fines, penalties, charges or imprisonment. HMRC considers closely related businesses as one entity for the purpose of VAT. If the combined turnover of these businesses meets the registration threshold, you must register for the standard VAT scheme.

You can apply to HMRC for VAT cancellation when your business meets the following conditions —

• You intend to stop trading or making taxable supplies;
• You mean to sell your business as a going concern;
• You can demonstrate your taxable turnover will not exceed the deregistration threshold of £83,000 in the next 12 months; or
• You’ve changed your business structure from, for example, Limited liability to sole trader and may fall below the VAT threshold.

Follow the steps below to deregister for VAT —

1. Log in to your VAT online account using your Government Gateway ID and password.
2. Select “cancel registration” and follow the cancellation prompts.
3. Provide the requested information such as —
   1. Value Added Tax registration number;
   2. Business name and address;
   3. Reason for cancellation;
   4. Details of any outstanding VAT payment; and
   5. Your bank account details.
4. Remit any outstanding VAT payments to HMRC.
5. Maintain a record of the cancellation.

If you cannot cancel your registration online, you can complete and submit via post form VAT7. You can contact Your Company Formations for help in this regard.

There could be several reasons why your application is taking too long. Some of these reasons include;

• Errors in your application — A VAT application with errors or incomplete information could delay the process since HMRC may need to contact you to get the correct details.
• High volume of applications — During busy periods, such as the end of the tax year or holiday season, HMRC may be processing a high volume of VAT registration applications with constrained human resource capacity.
• Additional checks — Some applications may require additional checks to minimise the risk of fraud, non-compliance, or address discrepancies.

From the first date of VAT registration, you are able to claim the VAT on goods or services purchased for business use and charge the appropriate VAT on goods or services you supply to your customers as a separate item on the invoice.

Remember, add VAT as a tax on the value of a product or service at each stage of production or distribution. The table below shows the different VAT rates that apply in the UK.

Zero-rated items are taxable at 0%, while VAT-exempt items are not subject to tax at all. You can also claim back VAT on zero-rated purchases but cannot reclaim VAT on exempt VAT purchases.

Once your business is VAT registered, you must charge the appropriate VAT on sales (output VAT), and you can also reclaim VAT on purchases (input VAT). At the end of your VAT period (usually every three months), add up all the output VAT you’ve charged and subtract all the input VAT you’ve paid. Then either pay HMRC the difference or they pay it.

Yes. You may choose to register VAT online even if your turnover is below the £85,000 threshold to enjoy the pros of applying for VAT. However, you must still follow the rules and submit VAT returns according to the required timelines.

Pros - benefits of VAT registration

• Professionalism — Having a VAT number makes your business look more professional and established, which attracts potential clients and partners.
• Input tax recovery — As a VAT-registered business, you can reclaim your money back when you file returns with HMRC for expenses such as rent, equipment, and supplies, reducing overall costs.
• Input VAT pre-registration recovery — You do not pay VAT on business expenses because you can reclaim VAT for up to four years for goods your business still uses and for the previous six months on any services or goods before registration.
• International trade — VAT registration may be a requirement for trading with other countries, making it easier to expand your business internationally.
• Avoid penalties — Register and file VAT returns on time to avoid penalties and fines from HMRC.
• Cash flow — VAT registration schemes can help with cash flow management by allowing you to delay paying VAT until your customers have paid you.

• You’ll lack competitive advantage — Your consumers cannot reclaim VAT paid on goods or services purchased from you and therefore make savings putting your business at a disadvantage.
• Lack of capacity to reclaim — You cannot reclaim input tax paid on goods and services you’ve bought for your enterprise from VAT-registered businesses.

HMRC designed the Flat Rate VAT scheme to make working out what you owe in VAT easier. Instead of calculating the VAT you owe based on each sale and purchase, you only pay a percentage (fixed percentage) of your turnover. HMRC sets the flat rate percentage by trade industry and sector.

For example, let's say the annual gross turnover of your travel agency is £100,000. Under the standard VAT scheme, you must calculate the VAT on every sale (output) and purchase (input) and pay the difference to HMRC. But with the flat rate scheme, you will pay the industry fixed rate of 10.5% of your annual turnover. If the agency were in the standard scheme, it would charge its customers the standard rate of 20%, which would be £100,000. But with the flat rate scheme, the agency would pay £10, 500.

However, the Flat Rate Scheme may not benefit all sorts of businesses. Call us at 0207 689 7888, and we will help you determine the best scheme for your business.

There are seven types of VAT schemes in the UK as follows —

HMRC regularly updates the eligibility criteria and limits of the schemes. For up-to-date information, always consult: https://www.gov.uk/how-vat-works/vat-schemes

Instead of completing a VAT return once every quarter, the Annual Accounting Scheme allows you to submit your VAT return annually if your turnover is less than £1.35m to be eligible for this scheme.

At the start of each year, HMRC will ask you to estimate how much VAT you expect to pay, and you may opt to work with the figure you paid VAT on the previous year’s VAT amount.

The business pays HMRC VAT based on an estimated annual liability in instalments. At the end of the year, the government expects you to submit a VAT return to HMRC and pay balances due or receive a refund for overpayment.

Yes. Since we began trading, we have helped thousands of businesses register for VAT, and our team is ready to answer any questions or concerns you have during and after you’ve registered. Our VAT services include —-

• VAT registration online which includes working with you to prepare and submit the correct documentation;
• Working with your or your accountant for consultation and advice on the appropriate specialist scheme for your business;
• Specialist scheme registration (Flat rate scheme, Annual Accounting or VAT Cash Accounting Scheme etc.); and
• Guidance on how to create a vat online account.

The way business register for VAT changed on 1 August 2022 with the rollout of HMRC's new VAT Registration Service (VRS) for limited companies.

Once your business is VAT registered, HMRC expects you to maintain digital records and file tax returns using compatible software. Making Tax Digital for VAT is an HRMC initiative that seeks to streamline their VAT reporting process, reduce reporting errors, and make it easier for businesses to manage and fulfil their tax obligations. Find records that must be kept digitally in compliance with MTD for VAT-registered businesses.