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Where Taxpayers and Advisers Meet

When to Register VAT?

Joined:Thu Apr 01, 2021 11:45 am
When to Register VAT?

Postby Norsington » Thu Apr 01, 2021 11:54 am

Hi everyone,

I have a question regarding when I should be looking to register for VAT. Context - I run a Limited Company (created 8 months ago), to which I expect my March monthly invoices to be paid by April 30th - which will take my business total revenue to £83k. Then on May 1st I'll send out April Invoices, which will be paid by 30th May - taking me to £87k.

At what point should I register for VAT? If I register now, will I be charged VAT from the payments I'll receive at the end of April (even though I will be under £85k)?
But then if I don't register, how will I charge VAT for my April invoices (to be sent on 1st May) which will need to include VAT?

Thanks in advance!

Joined:Wed Aug 06, 2008 3:09 pm

Re: When to Register VAT?

Postby les35 » Thu Apr 01, 2021 6:52 pm

When you do your invoice run on 1 May you will exceed the threshold. You then have 30 days to notify HMRC and register with effect from 1 June. (you can choose an earlier date if you wish, but your post suggests you don't want to).
You are concerned that you will have to pay VAT on invoices issued before you are registered. I don't think you will need to do that.

Remember to include any eligible input tax from before you are registered on your first Return. Check Notice 700, chapter 11 for the details:

Lorrina Smith
Joined:Thu Feb 16, 2017 5:18 am
Location:Augusta GA

Re: When to Register VAT?

Postby Lorrina Smith » Fri Apr 02, 2021 1:31 pm

You must register for VAT if your VAT taxable turnover goes over £85,000 (the ‘threshold’), or you know that it will. Your VAT taxable turnover is the total of everything sold that is not VAT exempt.

You can also register voluntarily.

Compulsory registration
You must register for VAT if:

you expect your VAT taxable turnover to be more than £85,000 in the next 30-day period
your business had a VAT taxable turnover of more than £85,000 over the last 12 months
You might also need to register in some other cases, depending on the kinds of goods or services you sell and where you sell them.

If you’ll exceed the VAT threshold in the next 30-day period
You must register if you realise that your total VAT taxable turnover is going to be more than £85,000 in the next 30-day period.

You have to register by the end of that 30-day period. Your effective date of registration is the date you realised, not the date your turnover went over the threshold.
Lorrina Smith as an accountant in SageNext Infotech LLC, this company provide world based cloud hosting services.
Sage 50 hosting providers

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