HM Revenue & Customs has launched a new tool to assist businesses in understanding the implications of VAT registration.
Businesses must register for VAT if:
- Their total taxable turnover exceeds £90,000 over the past 12 months
- They expect their taxable turnover to exceed £90,000 in the next 30 days
- They are based outside the UK but supply goods and services to the UK
Taxable turnover includes the total value of all sales, excluding items exempt from VAT.
Businesses can also opt to register for VAT voluntarily, even if their annual taxable turnover is below £90,000. Voluntary registration can be beneficial if most of your customers are VAT registered, as it allows you to reclaim VAT on your purchases without increasing costs for your customers.
The new HMRC tool helps estimate the VAT that might be owed or reclaimed by your business if you were to register. You can use the tool to explore ‘what-if’ scenarios, enabling you to compare different situations and understand their impact.
For more details, visit: https://www.gov.uk/guidance/check-what-registering-for-vat-may-mean-for-your-business
