In the United Kingdom, it is required by law that a business must register for VAT with HM Revenue and Customs (HMRC), if it has a turnover of more than £85,000, (threshold accurate as of February 2021).
You can also voluntarily choose to register your business. Companies registered for VAT will be issued a unique VAT registration number. VAT registration ensures that you are ready to grow as a business, creating a positive impression to your customers and allows you to reclaim VAT that you are charged by other businesses for goods and services.
Please note, VAT registration is included in our monthly accounting service.
CG Incorporations have had many years of experience in working with HMRC in filing VAT Registrations for our customers. We’ll ensure your application is dealt with and processed as quickly and efficiently as possible
We will ensure all the required procedures are followed to the letter
We can also assist you in obtaining an EORI number "Economic Operators Registration and Identification number".
On completion of the VAT registration process CG will ensure you receive:
- Your VAT registration certificate which includes details of your unique VAT registration number. This important document also outlines when your first VAT return is due and includes the date you reached the VAT threshold of £85,000 turnover, or the date of your voluntary application, known as the "effective date of VAT registration"
* Please note that we are registered for vat so all our prices are subject to 20% vat (unless you are based outside Europe or have an EU vat number).
** One off package price does not include ongoing service or maintenance, these services are available separately.
So What Is VAT?
Value Added Tax (or VAT) is a form of taxation which is applied to goods or services purchased by the consumer, which is why it’s sometimes known as a "consumption tax".
In the business world, VAT can be charged on most services or goods that are purchased. Indeed, the way your company handles VAT could be the difference between a truly legitimate enterprise and one that is running in an illegal fashion.
VAT registration certainly has an important role to play in the operation of any company and ensures that you are ready to grow as a business, creating a positive impression to your customers. Ultimately VAT isn’t a tax on individual businesses, but is paid by the consumer. Although companies will pay VAT to the HMRC, the customer has already paid the actual cost through the services/goods they have bought from you. Your business though, does have a legal responsibility to report it fully to HMRC.
What Are The Legal VAT Responsibilities?
When your company becomes VAT registered, you must then begin to charge VAT on all your services and goods, based on the full value of what you sell. However, you will also be eligible to reclaim VAT on any business related goods or services that you purchase.
By law, every quarter, businesses must complete a VAT return to disclose the amount of VAT they have charged or have paid to HRMC. This applies even if you have no VAT to disclose. If you prefer, VAT returns can be made annually, although the amount owed is still payable on a three monthly basis.
Put your confidence in CG Incorporation’s VAT Registration Service
CG Incorporations prides itself in offering a reliable, comprehensive VAT registration service to our clients. We will save you the hassle of applying for VAT registration yourself by completing the entire process on your behalf. We’ll complete all the necessary paperwork/ forms, taking care of all the formalities, before obtaining your VAT registration certificate. This usually takes around 14 days, from the date of application, although a small number of applications will be manually reviewed by the HMRC and could take longer.
VAT Registration Frequently Asked Questions
A:What is VAT? Value Added Tax (VAT) is a form of consumption tax that's charged on more or less to all goods and services that VAT-registered businesses provide in the UK. It is also charged on goods and some services that are brought into the UK from other European Union (EU) countries or countries outside the EU.
Do I need to register my business for vat?
A business must register for VAT if the turnover for the previous 12 months has gone over the 'VAT threshold' (currently £82,000). If your turnover does not exceed the current VAT threshold, you can still register for VAT voluntarily.
How does VAT work?
VAT-registered businesses charge VAT when they provide goods and services to either business or to a non-business customer. When VAT-registered businesses buy goods or services they can generally reclaim the VAT on their expenses. If you're not VAT-registered then you can't reclaim the VAT you've paid on your purchases.
When a UK vat-registered company do sales with other EU countries, you should not charge vat if the customer has an EU Vat number, but you need to declare this on EU sales List. Any customers who do not have EU Vat number, you should charge vat on the invoices and you need to pay this vat to HMRC when you do Vat returns.
Every VAT-registered companies must submit VAT Return (usually every 3 months) and ensure that payment of the VAT due has cleared to HMRC.
There are three rates of VAT, depending on the goods or services the business provides: standard - 20 %, reduced - 5 % and zero - 0 %. There are also some items that are exempt from VAT or outside the UK VAT system altogether.
A:It isn’t compulsory to register for VAT registration unless your turnover has exceeded or is predicted to exceed £85,000 in the near future. You can register at any time either as a sole trader or a limited company.
A:Definitely! Being VAT registered enables companies to claim back the VAT that they pay to their suppliers, but you will also need to charge VAT on your customer sales. There is also the facility to backdate VAT claims, (if you’ve retained a valid VAT invoice) for up to 6 months on services and up to 4 years on goods, for business related purchases.
A:There isn’t a lower limit for VAT registration, so if your turnover is less than £85,000 you can certainly make a voluntary VAT registration should you wish. Many companies choose to do this, especially if they are start-ups, as it gives the impression that the enterprise is a well-established company. It also promotes customer confidence and trust and increases the company’s credibility with suppliers.
When you register for VAT your business will be able to reclaim VAT on business related services or goods. Examples of this include:
- Vehicles used only for business
- Fuel and maintenance for the above
- Staff travelling
- Phone plans used for business calls
For more information see the government website.