Taking Account

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  • Taking Account

VAT registration issues

May 2010

Here are a few issues worth bearing in mind when you are considering the merits of registering or deregistering for VAT purposes.

Currently you must register if your VATable sales exceed £70,000 and you can ask to be deregistered if your VATable sales drop below £68,000.

Zero rated sales- Don’t forget to include sales at zero rate in your calculations.

Exempt sales - Don’t include exempt sales in your calculations, they are ignored for VAT registration and deregistration purposes.

More than one business? - If you personally have two separate businesses, the sales from both have to be considered together. Even if individually turnover does not exceed the registration limit, but when added together they do, you will have to register. If one is a sole tradership and the other a partnership with your spouse they would not be looked at together unless more complex business splitting rules applied. The type of legal entity is critical.

A temporary peak in your sales - If your business has a particularly good year due to circumstances that are unlikely to reoccur and that increase takes you over the registration level, £70,000, you can apply to have the registration deferred.

If you are unsure whether you need to register or deregister please call.

Hilton Sharp & Clarke