Value Added Tax is a fairly simple concept for those that have been running business for quite some time. But for startups and small companies that haven’t had to register for it before, it can be quite confusing. Bellow are answers to some of the most frequently asked questions about VAT.
Do I need to be VAT registered?
It depends on the sales turnover. Smaller business can apply for it if they want to, but it’s not required for them to do so. VAT registration is mandatory for companies with a sales turnover that exceeds £82,000.
What information to I need to provide?
It depends on the trading status of the business that is being registered for VAT. Generally, it’s required to supply:
- Nature of the business conducted;
- Information about the company director or sole proprietor;
- Business contact details;
- Bank details of the business;
- Projected annual value of supplies that VAT can be applied to.
Unless there are difficulties in verifying the identity of the business owner, there are no requirement to provide any original ID documents for a VAT registration.
Can I charge VAT before being registered?
A VAT certificate is required for every business that wants to charge VAT on their sales. It has the “effective date” from which the company is considered to be registered for VAT. Any sales without Value Added Tax done after this date will have to be reissued.
Can I reclaim VAT before being registered?
VAT can be reclaimed on certain provisions when it comes to capital expenditure. Currently, businesses can claim up to 4 years on goods that are still being used and 6 months for services. This claim must be made on the first VAT return and the original VAT receipt must be provided.
These are just some of the most frequently asked questions about VAT registration. It’s a fairly easy process that can be done with the help of a specialist or through appropriate registration websites.