1. Should I register for VAT?

My favourite answer to a VAT question is: “It depends!”. And that is true about the decision to register for VAT. The basic rule-of-thumb is: o if your customers are in business, register as soon as you can. o if your customers are private individuals, register as late as you can. You are obliged to register for VAT if your ‘taxable turnover’ exceeds £85,000 in any twelve consecutive months. You therefore need to monitor your turnover carefully. If your customers are in business, and therefore able to claim back VAT, it is worth registering for VAT before you reach that threshold. That will allow you to recover VAT on your costs.

2. What about invoicing?

There are rules about what information needs to be provided on your Sales Invoices once you are registered for VAT. Do make sure you comply with these rules. If your customers are in business, you are obliged to provide a proper VAT invoice. If your customers are private individuals, you do not have to provide a VAT invoice.

3. How can I claim VAT back?

You are required to obtain VAT invoices from your suppliers. Make it your practice to ask suppliers for an invoice. Usually this is sent electronically, and this is fine. If you use cloud storage, keep the invoices safe in the cloud. Don’t waste paper by printing them off. If you buy from retailers, then you will usually receive only a till receipt. As long as the total price of the purchases is less than £250, this document is usually sufficient to allow you to claim the VAT.

4. What does my website need to say about VAT?

It depends! If your customers are mainly in business, you can show prices net of VAT. But do put a footnote on each webpage indicating that prices are net of VAT at the standard rate. If your customers are mainly private individuals, then you should show VAT-inclusive prices. Again, you can add a footnote indicating that prices are inclusive of VAT where relevant.

5. Where can I find further information?

HMRC Notice 700 The VAT Guide is the best place for basic information. The link is: https://www.gov.uk/government/publications/vat-notice-700-the-vat-guide This has sections on the registration rules above, and about invoicing. The HMRC website has lots of more detailed information on other VAT matters. But you should note that HMRC will not provide VAT advice, nor direct you to the most appropriate options for your business.

Les Howard

Les Howard

VAT Consultant

I provide VAT support for businesses and charities. I am in my 25th year as a freelance advisor, so I know more about VAT than most people have forgotten!

www.vatadvice.org