VAT is a consumer tax collected by VAT-registered traders on their supplies of taxable goods and services in the course of business and by HMRC on imports from outside the EU. The current standard rate of VAT is 17.5%, although some goods are exempt, zero rated or taxed at a reduced rate of 5%.
You must register for VAT with HMRC on a compulsory basis if:
- you have supplied goods and services amounting to more than the registration threshold in the last 12 months (or shorter historical period)
- or you expect to supply taxable goods and services amounting to more than the registration threshold in the next 30 days alone.
The current registration threshold is £68,000 as of January 2010. Although some companies volunteer to register for VAT even when they are not near or have not been over the threshold, this can normally be to show compliance and make their company appear more established.
VAT registered companies must keep a record of VAT charged and paid, obtain invoices for purchases and charge the correct VAT rate on their sales. VAT payments and returns are normally due quarterly, one month after the end of the company’s VAT period which is assigned to them when they register.
On a more general note, it is your obligation to notify the HMRC through your local tax office of your established company office and provide them with the necessary information required to register your business for the relevant taxes.
To find out more information specific to your company, complete an online company formation with Wisteria Formations and let them refer you directly to Wisteria Chartered Accountants for VAT registration, completion of VAT returns and associated planning advice and services.
To complete your company registration begin here: http://www.wisteriaformations.co.uk
