Q: Can I register for VAT even if I am not at the mandatory threshold amount?
A: The answer is yes – this is called voluntary registration. Provided you are in business and making or intending to make taxable supplies you may apply. Note that if you register you must charge VAT on your supplies from your effective date of registration onwards.
For further information, see VAT Notice 700/1: should I be registered for VAT
Q: Can you be VAT registered and not be a limited company?
Q: What If I Take Over A Business From Someone Else?
A: If you take over a VAT registered business from someone else, as a going concern, you are liable to be registered, unless you qualify for exemption from registration or will trade below the registration threshold.
An option may be to transfer the previous VAT registration number to yourself, if you agree with the seller to do this then all VAT liabilities and responsibilities transfer to you. If the previous owner was not registered for VAT, you must look carefully to see if you need to register.
For further information, see VAT Notice 700/9: Transfer of business as a going concern
Q: When do I charge VAT on my sales and other supplies?
A: You must account for VAT on all supplies from the effective date of registration. We aim to issue a certificate showing registration details within 15 days of receiving an application though in some circumstances it may take longer. You must start keeping records and accounting for VAT from the date you become liable to register.
You may wish to increase your prices to include VAT. Don’t show VAT as a separate item on any invoices you issue until you’ve received your registration number. You can explain to your VAT registered customers that you’ll be sending them VAT invoices later. Once you’ve got your registration number, you should send them the necessary invoices showing VAT within 30 days
For Further Information, see VAT Notice 700/1 Section 5: Accounting for VAT
Q: When must I cancel my VAT registration?
A: You must cancel your registration if you’re no longer eligible to be VAT registered. E.g. you stop trading or making VAT taxable supplies, or you join a VAT group.
You must cancel within 30 days if you stop being eligible or you may be charged a penalty.
You can ask HMRC to cancel your registration if your VAT Taxable Turnover falls below the de-registration threshold.
For further information, see VAT Notice 700/11: cancelling your registration
Q: If my business is new and I have not hit the threshold in sales then I do not need to submit a return? I have not charged VAT to my customers, but obviously on my supplies I have paid VAT, so how do I claim back the VAT I have paid?
A: You will only be able to claim VAT if you are VAT registered. You can register voluntarily before you reach the registration threshold but you will then also need to charge VAT to your customers. You would need to weigh up the pro and cons of this for your business. For further information, see VAT Notice 700/1: should I be registered for VAT
Q: Is there a time limit for backdating claims for VAT paid before registration?
A: From your date of registration the time limit is 4 years for goods you still have on hand, or that were used to make other goods you still have and 6 months for services.
You can only reclaim VAT on purchases for the business now registered for VAT. They must relate to your ‘business purpose’. This means they must relate to VAT taxable goods or services that you supply.
You should reclaim them on your first VAT Return (add them to your Box 4 figure) and keep records including invoices and receipts, a description and purchase dates, information about how they relate to your business now.
For further information, see VAT Notice 700 section 11