The taxable turnover threshold, that determines whether businesses should be registered for VAT is currently £85,000.
Businesses are required to register for VAT if they meet any of the following conditions:
It is important for businesses that are on the cusp of needing to VAT register to keep a record of their transactions and ensure they register on a timely basis. There are penalties for failing to register on time. Once registered a business must charge VAT on all its taxable supplies.
Supplies which are specifically not subject to VAT are referred to as VAT exempt supplies. This includes insurance, financial services, postal services, health and education, although there are exceptions in every category.
It is also possible to voluntarily register for VAT even if your turnover is below £85,000. This can be worthwhile for businesses that make supplies to other VAT registered businesses as it allows them to recover VAT on purchases and can make a small business look more professional.
Please call if you want help registering your business for VAT purposes.