How do I register for VAT?


VAT can feel a little confusing at first. Is it voluntary? Mandatory? What do you need to do?

You can voluntarily register your business for VAT at any point from day one of setting up a business. However, you are required to register for VAT when your turnover reaches the VAT registration threshold (currently £85,000 or more in 2021). 

If your turnover has reached the threshold over the past 12 months, you’ll need to register for VAT online with HMRC, or have an agent register for you. 

It is important to know when you’re approaching the threshold, because you can be liable for a penalty if you don’t register your business within 30 days of reaching it. And nobody wants a fine!

Many business owners choose to use an agent, to avoid mistakes

You absolutely can register your business for VAT yourself, but many will hire an accountant as their agent for the security of knowing it has been handled correctly. This may help eliminate some of the stresses involved in the process. 

If you submit incorrect information by mistake, it’s possible your application can be delayed or even rejected. If you’ve reached the threshold, a delay or rejection can have damaging effects. Without a VAT number, you may then experience a delay on invoices being paid which can negatively affect your cash flow.

If you are going to register yourself, pay attention to these tips

If you would like to go ahead and register yourself, most businesses can register online. If there is a legitimate reason why you can’t register online, you can do it by post – follow the details on the link to see which forms you will need. 

When you register online you’ll first set up a ‘Government Gateway account’ if you don’t already have one. From this account you will be able to submit your VAT return to HMRC. 

Based on some of the things we’ve seen go wrong in the past, here’s our top tips for registering online and completing your VAT return yourself. 

Register the correct address 

You’ll register the address where you carry out your work activities. Your work address, or your home address if you work from home. This can also be the address of your accountant, as HMRC would be able to access your VAT records via your accountant should they ever inspect. 

Make sure you’re on the correct VAT scheme 

Having registered for VAT, you’ll need to choose a method for recording how much VAT you’ve charged and how much you’ve paid. 

The most common method is the Standard VAT scheme, which means using an accounting software like Xero to account for any VAT you’ve charged on your goods or services according to the date you raised an invoice. You’ll then complete a tax return every quarter and pay HMRC the balance of the VAT you’ve charged. Likewise, you can reclaim any VAT you’ve been charged on things you’ve bought for your business. 

The other alternative VAT schemes are:

  • The cash accounting scheme – The cash accounting scheme is similar to the standard VAT scheme, except it enables you to account for VAT according to payments received and made instead of invoices issued and received.
  • The annual accounting VAT scheme – Similarly to the standard VAT scheme, you’ll make advance VAT payments towards your VAT bill throughout the year, but instead of submitting quarterly returns, you’ll submit one VAT return annually. As you still have to calculate your VAT each quarter, we do not recommend this option.
  • The flat rate scheme – This scheme is designed to relieve some of the burden of the admin of VAT returns. Your business pays a fixed rate of VAT to HMRC and keeps the difference between what you charge customers and what you pay to HMRC. This can be of benefit, but there are times when the above standard scheme is more beneficial.

Make sure you get the accounting period right

The deadline for submitting your VAT return is usually one calendar month and seven days after the end of the accounting period, including the time for your payment to reach HMRC (factor this in mind so you leave enough time to meet this deadline!)

Your accounting period depends on the VAT scheme you have chosen. If you are using the Annual Accounting Scheme for example, your deadline will be different. 

To register online to submit and view your VAT account, make sure you have these 5 key pieces of info:

  • VAT Number
  • Data Registration
  • Post code of your principal place of business 
  • Quarter end 
  • Box 5 figure (ie your VAT liability – how much are you going to pay the VAT man)

At Golding you can imagine we’ve completed many VAT returns in our time! We can register as your agent and make sure you’re covering all bases. To register you for VAT we charge just £24 including VAT. Once you are VAT registered you can then claim the £4 VAT back!

Once appointed as your agent Golding will be able to discuss all things VAT with HM Revenue & Customs on your behalf. If you’d like to chat through this a little more, go ahead and fill out our contact form to get the conversation started.