VAT Registration

A business must register for VAT one month after its taxable turnover in a cumulative period of up to 12 months exceeds the VAT registration threshold.  It must also register immediately if it anticipates its turnover in the next 30 days will exceed the VAT registration threshold.

The VAT registration threshold is set in the budget each year and at 1 April 2012 it is £77,000.

Once registered a business must stay registered until it ceases to make taxable supplies, or its taxable turnover in a 12 month period drops below the VAT de-registration threshold.  This threshold tends to be £2,000 lower than the registrations threshold and at 1 April 2012 it is £75,000.

Any business that is making taxable supplies may register voluntarily before it exceeds the registration threshold.

In general businesses providing supplies to other businesses and those providing zero rated supplies are recommended to register as soon as possible.  On the other hand, businesses supplying standard rated taxable supplies to the public (such as restaurants) fare better by delaying registration for as long as possible.

The registration process is online via the HMRC website.