What is VAT and how do I register for it? 

VAT can be defined as a type of tax that is added to services & products by businesses registered under VAT. The final amount that is charged to the customer may vary based on factors like their country of residence, the type item that is being sold, etc. Majority of the countries operate VAT at some level. In the United Kingdom, VAT is handled by HM Revenue and Customs (formerly recognised as Inland Revenue).

From a customer’s point of view, they pay this tax unknowingly. For instance, in the supermarket, the products are listed with the prices that are inclusive of VAT. Nevertheless, for business owners, VAT is only applicable if you have a registered company or organisation. Since most businesses get themselves registered for VAT, the products or services they offer are often publicized excluding any VAT.

As of now, VAT is primarily applicable at 1 of 3 bands

1. Zero-rate (0%),
2. Reduced rate (5%) and
3. Standard rate (20%).

The percentage charged is based upon the item itself. Take certain groceries for instance, where VAT is zero-rated, whereas for kids clothing VAT might often be at around 5%.

Is registration compulsory?

Presently, you can find 2 types of registrations for VAT

1. Voluntary
2. Mandatory

In case the turnover of your sales surpasses £85,000 or is likely to reach that level in the coming days, then registration is compulsory. On contrary, if the turnover is less than the above level, then you could still register VAT voluntarily.

How to register online?

We offer an online VAT registration service, for more information click here.

VAT Returns

After successful registration, you’ll have to submit your quarterly return to the HMRC. It’ll cover things like:

The total VAT you can reclaim on the purchases.
The total VAT you owe from the sales.
Your total purchase & sales value.
The total VAT refunded by the HMRC, if any.

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