VAT registration in UK Being a business owner, it is extremely important to be aware of and have a clear idea about the concept of VAT or value added tax. It is extremely necessary to understand the concept of VAT, before going into the detailed information about VAT registration. In order to know and understand more about the process of VAT registration, having a good and clear understanding about value added tax is extremely crucial. Being a business owner in UK, you must have a clear conception about what is VAT, who needs to pay it and how it works. In order to know about VAT registration, you need to know when it is compulsory for your company to have VAT registration and what are the positives and negatives of voluntary registration. VAT or value added tax is a tax that is applied to most of the business transactions, which involves transfer of services and goods.
Your company becomes legally subjected to VAT payment, once its business turnover reaches a certain limit. You are to make the VAT payment to HM Revenue & Customs. Generally, a business charges VAT on the basis of its sales, which is referred to as output tax and pays VAT on the basis of its purchases, which is known as input tax. If a business, which is VAT registered receives more output tax from sales than the payment it makes on input tax, it has to pay the difference to HM Revenue and Customs. On the other hand if the business pays more input tax, compared to the VAT charged for sales, then the Revenue refunds the difference to the business.
VAT registration becomes compulsory for a business, when the total supply of taxable goods and services of the business amounts to more than £64,000 in the last 12 month period or in case the business anticipates a turnover of £64,000 in the next 30 days. The figures are set by the government and have the possibility to be changed in future. It is important to know that there are certain goods and services, which are exempted from VAT, such as loans, insurance some education and trainings. Businesses supplying only the exempted goods and services need not register or make VAT returns or payments. Though there are some hassles that businesses need to experience regarding keeping VAT records and many others, if they are VAT registered, but voluntary registration in case of businesses having turnover below the aforesaid amount, has many advantages as well. Voluntary registration enables you to reclaim the value added tax, which you need to pay out on goods and services.
This can VAT reclamation can be of considerable amount depending in your business. The voluntary registration can also help you to increase the credibility of your business, as there are many companies who prefer dealing with businesses having a VAT number. There are many UK based companies who offer VAWT services to assist you through the process of VAT registration in UK. Novik Ltd is one of the renowned among such companies which offers VAT services. There many other companies as well. You can get to know more about them by searching the internet.
There are many companies that also facilitate online VAT registration. VAT Centre is one such company which provides online VAT registration services in UK. You can learn more about VAT registration in UK by surfing the internet.
Mike Bern is the author of this article on vat registeration. Find more information about vat registartion uk here.