What to do if you’ve lost your UTR number
Whether you're someone who likes to file your annual self-as...
By Lynne Gowers on 3rd July 2015
As the owner of a Limited Company, a partner in a partnership or a freelancer, you’ll need to make a decision about registering for VAT – Value Added Tax.
Registering for VAT allows you to claim value added tax back where it’s charged on business expenditure. It also means you have to add the 20% rate onto your invoices.
Every quarter, you submit a VAT return. This shows how much you’ve charged (output tax) and how much you’ve paid (input tax). If the output tax is higher than the input, you pay HMRC the difference. If it’s the other way round, you get a refund.
If you have significant outgoings and most of your revenue comes from clients who are already registered, opting to register for VAT can help increase your profits.
There are three different schemes:
The quickest way to register for VAT is at www.hmrc.gov.uk. You’ll need to register for HMRC Online Services or the Government Gateway first.
Your other option to get around all the paperwork is to employ the services of a contractor accountant like us. We’ll give you advice on which VAT scheme is right for your business, and we’ll also get you registered for no additional cost.
If your company turnover exceeds £81,000 in any 12-month period, VAT registration becomes compulsory.
The cash accounting scheme is available if your turnover is below £1.35 million.
You’re eligible for the flat rate scheme if your annual turnover is less than £150,000. If your turnover then exceeds £230,000 in a financial year, you’ll no longer qualify.
For more information on VAT and how it can affect your business, click on the link at the top of this page to download our free guide.
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