Q: What is the current VAT threshold for small businesses?
Aug 20 2008
Answered by: Clive Lewis Ask a question
Businesses must register for VAT when their turnover (ie, sales) rises above £67,000 in the previous 12 months, or if you expect it to do so in the next 30 days. The businesses must start keeping records and charging VAT to its customers from the date of compulsory registration, which is usually the month after the business’s annual turnover exceeded the threshold.
The registration threshold is usually increased each year in the Budget, and £67000 is the figure which applies from 1 April 2008.
Even if you are not required to register by law, you might choose to do so voluntarily, so that you can reclaim the VAT on things you buy for the business. However, you will need to start charging VAT to your customers, which will put up your prices, and you will need to keep records and do VAT returns.
You may find it helpful to get advice from an accountant about whether you should register for VAT and how to deal with VAT generally.
More information is on the HMRC website at www.hmrc.gov.uk/vat/vat-registering.htm <http://www.hmrc.gov.uk/vat/vat-registering.htm> and in VAT notice 700/1
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