As your business grows you will need to register for VAT with HM Revenue and Customs (HMRC). This is a legal obligation that most companies with more than £85,000 of taxable turnover must comply with. While this can seem like a daunting process, our handy guide makes it as easy as possible.
What do I need to register for VAT?
You will need a few simple pieces of documentation to hand to register for VAT. First, you will need either your National Insurance number or your Unique Taxpayer Reference (UTR) number. You will also need the details of the business, as well as documentation of any other businesses you own or have owned in the previous two years such as certificates of incorporation. If you have bought the business you are registering, then you will also need a record of sale to verify this. Finally, you will need the details for the business bank account you use. Having these documents with you when you start the process will make the process much easier.
How much does it cost to register for VAT?
It is completely free to register for VAT with HMRC yourself. Whether you choose to go through the process online or through a physical form, the government imposes no charge. However, you will need to complete a VAT return and send it to HMRC – usually every three months. Hiring the services of a professional accountant to complete your returns will obviously be an additional cost for your business but provides you with peace of mind. Similarly, using accounting software will also incur costs, but will make the process much easier.
How do I register for VAT?
You can register for VAT either by post or online. To register by post, fill out the VAT1 form, which can be found on the government website, and send it to HMRC. You will also need to send any accompanying forms with it, if necessary. This process is much easier online and even if you start by sending off a paper form, you will have to submit your VAT returns and payments online. To register for VAT online head to HMRC’s website and use your Government Gateway login to begin the process. Do not worry if you don’t have a login, you can create one before you start. Make sure you have all your documentation to hand and follow the instructions HMRC give you.
What do I do once I am registered?
Once registered you will receive your VAT number and information on when you will need to submit your VAT returns and payments. If you have registered online, a VAT online account will be created which will help you manage this process. From this point you will need to include VAT in the price of your goods and services and add it to your invoices. At the time of writing the standard VAT rate is 20%. You will need to keep records of the VAT you pay for business expenses and how much VAT you charge your clients. This will be key information for your VAT return which is usually submitted every three months.
You can nominate a qualified accountant to register for VAT on your behalf. At Bells Accountants we’d be happy to take this on and can handle all your VAT needs and deal with HMRC directly. Just call 020 8468 1087 or email to get in touch with your local accounting experts.