Do I have to register for VAT?
Posted on 10th February 2021 at 09:23
As the minimum VAT level is set for any business that exceeds an annual turnover of £85,000, it is important to register for VAT if your last 12 months rolling taxable sales or you envisage your current turnover will meet this threshold. This amount is applicable on all turnover that is not exempt from VAT. There is the option for voluntary registration.
It is mandatory to register for VAT if:
The business taxable turnover will exceed £85,000 within 30 days.
The annual VAT taxable turnover exceeds more than £85,000.
Registration may also be needed subject to the services or goods being sold and where they are sold.
In case, your business exceeds the £85,000 limit within the next 30 days you need to register. The registration is to be done at the 30-day period end with the effective date being when you realised and not the date the VAT limit was exceeded.
If a business exceeded the VAT limit in 12-months it must be registered at the end of any month if the total annual taxable income was in excess of £85,000.
Registration is needed when the business exceeds the taxable limit within 30 days in the month that the taxable limit is exceeded. The date of registration is effective from the first day of the second month after exceeding the threshold.
For those businesses based in Northern Ireland that offer services or sell goods exempted from VAT
If you sell goods or services that are VAT exempt/out of scope and are based in Northern Ireland but require to buy goods for your company that exceed £85,000 from VAT registered suppliers in the EU you will need to register.
Another instance where VAT registration may be needed is for a business that is already VAT registered and has been taken over.
For businesses that are non-UK based, there is VAT threshold. However, if services or goods are supplied within the UK it will need to be registered for VAT.
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