Registered for VAT, or thinking about it?

Lets explore the types of VAT registration and how they can support your business.

There are two types of VAT registrations in the UK. These are standard, also known as compulsory, and voluntary VAT registrations. Let’s look at each one in turn.

Standard VAT registration applies to businesses that exceed the VAT threshold, which in the UK is currently £90,000 turnover in a 12-month period. Simply how it works is, businesses must charge VAT on their taxable supplies, and can reclaim VAT on their purchases and expenses. VAT returns are usually submitted quarterly, though there are some exemptions depending on your business type.

Voluntary VAT registration on the other hand is for businesses below the threshold that choose to register anyway (voluntarily).

Let's look at why you would do this. There are two main reasons. Firstly and most obviously, is to claim back VAT on business expenses, and secondly to improve business credibility. Just like standard registration, voluntary registrants also submit quarterly returns.

In the UK, there are several VAT schemes designed to suit different businesses and needs. These schemes aim to simplify VAT reporting and payment, manage cash flow better, or offer tailored rules for specific industries.

The main schemes are:
- Standard accounting scheme
- Flat rate scheme
- Cash accounting scheme
- Annual accounting scheme
- Limited cost trader scheme
- VAT margin scheme
- Tour operator margin scheme
- Retail scheme; and
- Capital goods scheme

Each scheme has it's own eligibility criteria, benefits, and obligations. Choosing the right one depends on your turnover, transaction types, and how you prefer to manage your admin.

Not sure which VAT route is right for you?
Whether you're just starting out or reviewing your current setup, feel free to get in touch for a chat. There's no pressure, just practical advice to help you make the best decision for your business. If you need a hand, I offer a free no obligation consultation and would be happy to support you.