VAT registration: the facts
Mar 14 2006
VAT is administered by HM Revenue & Customs. If your annual turnover exceeds £60,000 in the previous 12 months you are required to register for VAT. This means that once registered you will be given a unique VAT number relevant to only your business.
You will be required to charge VAT usually at the standard rate of 17.5% on your sales invoices, so that for example if your invoice value is £1000 you will add £175 and the customer is required to pay you £1,175. Every quarter you will complete a VAT return showing how much you have collected in VAT (all the £175s in the above example, called Output Tax) and how much VAT you have paid to your suppliers (called Input Tax) and you will be required to pay over the difference, assuming that that the Output Tax exceeds the Input Tax. The question of being a sole trader or limited company is a matter of fact. If you trade as a sole trader (for example A. Smith or Arthur Smith) the VAT registration will be in that name. If you have formed a limited company (Arthur Smith Limited) the VAT registration will be in that name.
Public Notices which offer relevant advice are:
Notice 700 – VAT General Guide
Notice 700/1 - Should I be registered for VAT
Notice 700/15 - The ins and outs of VAT
These can be located here.
The VAT advice line will help with queries on 0845-010 9000
The relevant form is an Application for Registration - VAT 1
You can download these from the internet here.
If you have any doubts you should talk to your accountant who will explain the requirements in greater detail and help with specific queries or even complete the VAT return on your behalf.
There are currently no comments on this article
Comments