How to register for VAT

Knowledge base from Boox

By Jonathan London on 28th May 2015

How to register for VAT

It is relatively straightforward to register for VAT, particularly if you choosing to sign up with an accountant who will deal with most of the paperwork on your behalf.  If however you’re looking to try and go it alone for the time being,  our guide to the process could help you avoid any potential pitfalls.

Do you need to register for VAT?

Of course it makes sense to check whether you actually need to register for VAT. Doing so means that you can claim VAT where it is charged on business expenditure and it means you can also add the current 20 per cent rate on invoices you send out.

Every three months you are required to submit a VAT return to HMRC, this will show how much VAT you have paid and received. Depending on the figures you may get a refund or have to pay the difference to HMRC.

It is important to note that if your turnover exceeds £81,000 in any 12-month period then registering for VAT is compulsory. You may also have to register for VAT if you take over a business that is already registered with HRMC.

Before embarking on the registration process it makes sense to collect together all the paperwork you will need.

In order to register you need to make sure you have the following pieces of information:

  • National Insurance (NI) number or tax identifier
  • Certificate of incorporation/incorporation details
  • Details of all associated businesses within the last two years
  • Business bank account details
  • Details of the business that has been transferred if relevant

You can choose to register for VAT either via the HMRC’s website or via the traditional paper application.

If you trade internationally or a part of a group or you’re disposing of assets on which 8th or 13th Directive refunds have been claimed then you will have to register via post as the online option is not available to your company. Also HMRC’s online system cannot process those registering a partnership, so you will need to submit a VAT2 form.

Even if you opt to do it via the paper method, it is important to remember that you will still be required to submit your VAT returns via the web. You will also need to make any VAT payments online.

Once you have your VAT4

When your certificate of registration arrives, usually within 14 days, you will be able to register for the crucial HMRC VAT Online Services. It is an easy process and you will need to make sure you have the following information readily available.

  • Your VAT registration number – this is on your VAT4.
  • The postcode of your main place of business
  • The date you registered for VAT – again this is on your certification of registration.

HMRC will want to know the final month of the last VAT return you submitted – you should leave this blank as you have only just registered.

The Box 5 figure from the last VAT return you submitted will be zero as you have not submitted any VAT return.

Why register for VAT?

One of the benefits of registering quickly for VAT is that you can reclaim for purchases made over the past few months.

You can claim back VAT on the majority of goods that were purchased in the four years before you registered, as long as you still have the goods in your possession and they are being used solely by your business.

In addition, VAT on services bought in the past six months can also be reclaimed. Again, there are conditions to recovering the tax – the services must have been purchased by your company and they must have been for VAT taxable business reasons.

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