When should you Register for VAT?

Thursday, January 18, 2024

Unsure if you need to register your business for VAT? Unclear when you need to register and why? Then read on and all will become clear… 

You must register your business with His Majesty’s Revenue & Customs (HMRC) for VAT as soon as your total VAT taxable turnover for the last 12 months goes above the current VAT threshold of £85,000, or if you anticipate that your turnover will exceed £85,000 in the next 30 days. 

You can also choose ‘voluntary registration’ and register for VAT even when your total VAT taxable turnover is under £85k. This option means that you must pay HMRC any VAT you owe from the date they register you. 

It’s important to be aware that registering for VAT isn’t applicable when you exceed the VAT threshold in your financial year, the tax year or a calendar year. It’s within any 12-month period. It’s also important to understand that VAT registration applies to limited companies, partnerships and sole traders, so regardless of how you operate your business, you need to be aware of your taxable turnover all year round.   

You must register your business with HMRC within 30 days of the end of the month that you exceeded the threshold. This will mean that your VAT registration begins on the 1st of the following month.  

If you become aware that you are about to exceed the threshold within the next 30-days, then you must register by the end of that 30-day period. 

Please note that late registration will not only result in paying VAT on any income from the date you should have registered but it could also mean you receive a penalty. This is a costly oversight so make sure you’re on top of your numbers at all times.  

At Ellacott Morris we use Xero cloud accounting software with all our clients, ensuring complete control of all business finances and making vital information available at the touch of a button, from anywhere in the world. This real-time access not only improves business performance but prevents costly mishaps like not realising you needed to register for VAT.  

There are also certain criteria that mean you need to register with HMRC even if your VAT taxable turnover doesn’t exceed the £85k threshold. If your business can tick the box for all of the following, then registration is also compulsory.  

  • Your business in based outside of the UK 
  • You are based outside of the UK 
  • You supply any products or services to the UK (or plan to in the next 30 days) 

Three ticks mean VAT registration is required.  

You can find out more about VAT registration on the HMRC website at or you can contact the experts and get in touch with the team at Ellacott Morris. We can manage every aspect of your VAT, removing the stress and strain, enabling you to remain focussed on running your business. Find out more at 

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