VAT Registration Answers

1. What is VAT?

   Value Added Tax (VAT) is the sales tax levied against goods and services within the UK. Businesses are expected to charge VAT on goods and services they sell, but they may reclaim VAT they have paid on goods/services bought for the business. In order to do so they need to carry out a VAT registration.

2. What is VAT Registration?

   Simply, VAT registration is the process of registering your company with the Inland Revenue (HM Revenue & Customs). VAT registration allows you to recoup VAT that you have charged. Any business can carry out a VAT registration; it is not restricted to limited companies. "Business" is defined as any activity whereby you are getting paid for goods or services. Being a business carrying out such activity, you are necessarily charging your customers VAT. You are collecting this money on behalf of HMRC and you will be expected to pay it to them on the appropriate date.

3. What is a VAT Number?

   A VAT number is the registration number you will be issued upon correctly registering your business for VAT with HMRC. It should be displayed on your VAT invoices and receipts. It may also be displayed on your company/business website and stationery.

4. Should I register my company for VAT?

   This depends on your circumstances. Currently there is a threshold set at £70,000 from 1 April 2010, where if you will have a turnover exceeding that in 12 months of trading then you are required to carry out a VAT registration. You can voluntarily register for VAT if your earnings will be below that threshold and there are some benefits to doing so.

5. What are the rates of VAT?

   From January this year, the standard rate of VAT returned to 17.5%. From the 4th of January 2011 the new standard VAT rate will be 20%. A list of the rates of vat and what they mean can be seen in our blog article VAT Registration. A full list of VAT rates and thresholds can be seen on the HMRC site.

6. Are there any benefits to voluntary VAT registration?

   Voluntarily registering your company for VAT, even when you are not required to do so can be beneficial to a company, allowing it to claim back VAT on purchases, as well as charge it on sales. This can be especially of benefit to companies who are selling one sort of VAT Rated product while buying another. So if you are selling zero rated, but buying standard rate, you can actually receive money back from the HMRC.

7. Does the Company Warehouse provide a VAT registration Service?

   Yes. Our low cost VAT Registration service is straightforward and easy to use. We have been highly praised by HMRC both for the levels of VAT registrations we have carried out on behalf of companies and the quality of our registrations. Because of our knowledge and experience, VAT registration through us is error free meaning the process is not slowed by the common errors and omissions that occur when people file their registrations for themselves.

8. What are the benefits of Online VAT Registration?

   Online VAT registration makes the process much easier. We have an agency account with HMRC and carry out the registration on your behalf. All you have to do is fill out our online registration form, complete a questionnaire and we do the rest of the VAT registration work for you.

9. How much does VAT registration Cost?

   Costs vary, the current cost can be seen on our VAT registration page.

10. Can I not register for VAT myself?

    Yes, you can. However, because of the complex nature of the forms, the jargon used and more - most people will find our service more appropriate. HMRC statistics show that around 30% of applications received from individuals are prone to error or omission which slows the process and means that you will not be properly VAT registered.

11. Is the VAT registration service tax deductible?

    Yes. The good news is our VAT registration service is 100% tax deductible.

12. Can I reclaim for VAT on goods I purchased before VAT registration?

    Yes. As long as you have appropriate VAT invoices and receipts you can reclaim for VAT you have paid on goods or services that you purchased for the business up to 3 years before VAT registration.

13. My business is not VAT registered can I still reclaim VAT we've paid for goods/services?

    No. In order to reclaim VAT you must first complete a VAT registration for your business. Once registered you can claim VAT on goods/services you sell and also reclaim VAT on goods/services you have purchased for your business from others. Remember that you do not need to wait until your turnover reaches the VAT registration threshold, you may choose to opt for Voluntary VAT registration beforehand.

14. What happens after my business is VAT registered?

    Once the VAT registration process is complete then you can start reclaiming VAT on goods/services you buy for your business. You will also need to charge VAT on goods/services you sell and submit a regular VAT return (usually every quarter). If you need help with your VAT returns our Start-up and fixed fee accountancy services provide ideal support.

15. I've completed a VAT registration but things have changed can I de-register?

    If you carry out a VAT registration it is still possible to de-register in the future. It is difficult but not impossible. If you voluntarily registered for VAT and your turnover is below the VAT threshold then it might be easier to convince the HMRC to allow you to de-register. The most important thing is making sure all your VAT returns and payments are in order before VAT de-registration can take place. If you need further guidance with regards VAT registration and de-registration contact our VAT Registration team on 0800 0828 727.