This article can be considered a step-by-step guidebook to VAT registration for UK registered businesses. Please note that VAT registration is mandatory for businesses having a turnover of more than £82,000* in a period of 12 months.
Documents Required for VAT Registration
The following documents are required for VAT registration:
- NI (National Insurance) number/ Tax Identification Number,
- Details of Incorporation,
- Details of associated businesses within the last couple of years,
- Details of the bank account associated with the business,
- If the business is a transferred or an acquired business, the details of the same are needed.
Online VAT Registration
Barring unusual circumstances, you can opt for online VAT registration. It’s the easiest way of registering for VAT. The unusual circumstances include a business that is involved in international trading or a business that is actually a part of a group. You may opt for VAT registration on this page.
There’s another important point to remember if you are registering a business partnership for VAT availing online VAT registration. For registration of business partnership, you should fill up the VAT2 paper form separately and submit the same. This form will inform the details of your partners to HMRC. This is not yet included in the online portal and hence, you have to fill up all these details on the paper form.
HMRC is Mainly Paperless
We would like to remind you that HMRC is fully automated. You still have to submit your VAT returns and other VAT-related payments electronically.
After receiving your certificate of registration (VAT4), you can opt for online VAT services with HMRC. You need the following information to do the same:
- VAT Registration number,
- Pin code of your primary place of business,
- Your date of VAT Registration,
- Final month of your last VAT return,
- Box 5 figure from your last VAT return submitted by you.
The 1st 3 pieces of information can be found on your certificate of registration.
If the business is relatively new, you can select N/A (“Not applicable”) for the 4th point where you have to submit the “final month of your last VAT return”. For the last point, you should enter 0.00 and you’ll be set to go.
Reclamation of VAT
Once you have opted for VAT registration and have completed all the formalities, there’s a good chance that you can reclaim any earlier VAT paid from your pocket. There’s some terms and conditions on the basis of the dealings that is whether it’s done on goods or services.
VAT reclamation on specific purchased goods can be done up to 4 years before the date of your VAT registration if and only if:
- The goods were purchased by you as an entity that is currently registered for VAT.
- The goods are bought only for your particular business purposes that are applicable for VAT.
- The goods are still with you or the same goods are used by you to manufacture other goods that you still hold.
You’ll see that the last point is pretty difficult to achieve because goods as old as the ones that are bought almost 4 years back from the date of your VAT registration generally get sold by that time. We would also like to draw your attention to the second point. The goods should be bought only for VAT applicable businesses. Therefore, if you were involved in any dealing that’s included VAT-exempted goods, you’ll not be able to reclaim VAT from HMRC.
VAT reclamation on specific purchased services can be done up to 6 months before the date of your VAT registration if and only if:
- The services were purchased by you as an entity which is currently registered for VAT.
- The services were used for particular business purposes that are applicable for VAT.
VAT registration is seen as a hassle due to the notion of the involved paperwork. But that problem can be solved to a certain extent through the use of good accounting software. After all, it does provide a business with many benefits that puts a justified lid on the amount of hassle. Hence, it’s advisable to opt for VAT registration as soon as possible.
*All rates and thresholds quoted are correct at the time of publication.