Starting a new business? Get 40% off our accountancy services for 3 months! 😎

x

The simple answer to this is no; you don’t need to be a limited company to be able to register for VAT. The more comprehensive response is that HMRC doesn’t differentiate between limited companies and sole traders when it comes to VAT registration.

Instead, HMRC uses a rolling turnover threshold as the marker for when any business needs to start paying VAT. Rolling turnover just means that it takes into account the turnover within a rolling 12-month period, rather than a fixed time period such as a financial or calendar year.
 

What is VAT, anyway?

What is the VAT registration threshold?

What if my business is below the VAT registration threshold?

Starting up a business brings with it a whole whirlwind of things to think about, lingo that makes no sense, and payments you didn’t realise you’d need to fork out for (as well as ways of relieving some of these costs). Value Added Tax (VAT) is one of those headache-inducing realities that you might well need to deal with at some point in your entrepreneurial career.

Value Added Tax (VAT), like the name suggests, is a tax added to the value of most goods and services in the UK, though there are some exemptions. It’s not an exhaustive list, and HMRC go into more detail on their website, but VAT-exempt items might include:

Our video guide to VAT explains things in a bit more detail below.
 

The current threshold for VAT registration sits at £85,000. So, if a business starts making a VAT-taxable turnover of £85,000 or more within any 12-month period, then they will need to register to pay VAT. It’s worth noting that HMRC defines VAT-taxable turnover as: “The total value of everything you sell that is not exempt from VAT.”

If you think that your taxable turnover could reach the threshold within a rolling 30-day period, then you must register for VAT immediately.
 

Comprehensive VAT return service

From only £40.00 per month

Learn more

If your rolling turnover is less than £85,000 then you aren’t required to register for VAT. However, there are some businesses which opt for voluntary VAT registration for a number of reasons including:

Check your VAT-taxable turnover regularly to ensure that you don’t pass the £85,000 mark without realising!

If you think you need to register your business for VAT but aren’t sure about exemptions or which VAT scheme is best for you, get in touch with our online accountants and bookkeepers. Call us on 020 3355 4047 or get an instant online quote.

About The Author

Stephanie Whalley

Serial snacker, compulsive cocktail sipper and full time wordsmith with a penchant for alliteration, all things marketing and pineapple on pizza.

More posts by this author
Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments

Read more posts...

What is a Non-Established Taxable Person for VAT?

There are special VAT rules in place for online sellers who are classed as non-established taxable persons (NETPs), and use an online…

Read More

The Accountancy Partnership – Our Positive Reviews

Here at The Accountancy Partnership, we’re proud of our customer reviews The reviews we receive from our customers show how hard we…

Read More

What Employers Need to Know About Statutory Maternity Pay

There’s lots to think about as an employer, but one big thing you don’t want to fly under your radar is what…

Read More
Back to Blog...

Confirm Transactions

The number of monthly transactions you have entered based on your turnover seem high. A transaction is one bookkeeping entry such as a sale, purchase, payment or receipt. Are you sure this is correct?

Yes, submit my quote
No, let me change it

Please contact our sales team if you’re unsure

VAT Returns

It is unlikely you will need this service, unless you are voluntarily registered for VAT.

Are you sure this is correct?

Yes, the business is VAT registered
No, let me change it

Call us on 020 3355 4047 if you’re not sure.

Bookkeeping

You will receive our bookkeeping software Pandle for free, as part of your package.

You can use this to complete your own bookkeeping, or we can provide a quote to complete your bookkeeping for you.

Please select and option below:

I will do my own bookkeeping
I want you to do my bookkeeping

Call us on 020 3355 4047 if you’re not sure.