Should I register for VAT?

Being VAT registered is often advantageous as it allows you to recover VAT on your business expenditure.

If your taxable turnover is expected to exceed the current VAT registration threshold it will be mandatory to register for VAT. Even if you expect your taxable turnover to be below the threshold, you can, and probably should register voluntarily.

When to register

In general VAT registration is normally advantageous when supplying services to other businesses (B2B). There are more advantages than disadvantages and your business customers won’t object as they themselves will probably claim back any VAT you charge.

Day to day you will incur expenses including VAT and being registered will allow you to lower your tax bills. Being registering may also mean you can access the flat rate scheme which is a great way for contractors, freelancers and small businesses to manage their VAT.

With our support and online accounting software, being VAT registered is effortless – our software makes light work of record keeping and we file your VAT returns each quarter.

When it may not be the best option

A situation where VAT registration may not be the best option is if you provide services direct to consumers.

Being VAT registered means you’d need to charge your customers VAT, probably at 20%. Your competitors, if not VAT registered, would be at a significant advantage by being able to charge customers less.