Consider Whether To Register For VAT Voluntarily
Posted by TaxInsider on Tue, 27/11/2012 - 17:15 461
A business must register for VAT if the VAT taxable turnover in the previous 12 months is more than the VAT registration threshold (£77,000 from 1 April 2012) or it is expected that this threshold will be exceeded within the next 30 days.
A business whose turnover is below this level does not have to register for VAT but may choose to register voluntarily. This will allow VAT suffered on purchases and expenses to be reclaimed. This may offset the burden of charging VAT and accounting for it to HMRC.
Simon has turnover of £30,000 a year. He does not need to register for VAT but chooses to do so. As a result he is able to recover his input VAT. In the first year of registration he recovers input tax of £3,500, making voluntary registration worthwhile.