Welcome back to the Roger Smallman & Co. blog! This latest post looks to address a common question our accountants receive from Southampton based businesses: when should I be looking to get VAT registered? It also touches on some other, related aspects of VAT. But being a fairly brief overview, it’s by no means conclusive! For tailored advice, or help in another area like payroll management, call our accountants directly on 023 8022 2215
As it stands, the VAT threshold is £85,000. If your turnover exceeds this number, you are required to register. The same goes for if you think your turnover will exceed £85,000 in the next 30 days. While this seems simple, there’s one thing that has tripped up Southampton businesses who’ve visited our accountants for advice on VAT: from what point this turnover is calculated…
Being separate to personal and corporation tax, VAT is not tied to the end of your financial year. Instead, it’s calculated on a rolling 12-month basis: e.g between Jan-December, Feb-Jan etc. The March 31 deadline for other taxes bears no relation. It’s down to you, or your accountants, to note when turnover gets close to this threshold. Keep a close eye on invoices at the end of every month, during a period when VAT begins to become a real possibility.
Another important consideration is if you are self-employed and have numerous businesses, their combined turnover should be put toward this cap; your sole trader income is treated as one, while Limited Companies are treated individually. So while registering for VAT and dealing with it yourself is certainly possible, there are good arguments for getting in professional accountants to handle it for you – such as the VAT return specialists at Southampton’s Roger Smallman & Co.
These arguments include: saving significant time on the returns themselves, the peace of mind that returns will be accurate and not lead to you being over charged, under charged or subject to audit, and the expert advice you can receive regarding business growth and VAT, customer VAT registration and the interactions between VAT and expenses. So if you want to ensure you’re fulfilling your VAT obligations but also making the most of the opportunities available to you, don’t hesitate to contact the accountants at Roger Smallman & Co. Ltd in Southampton.