Hello
I registered my business last year in April. I started selling in July and I have now 55k turnover so I think in 2 months I will go over 83k vat threshold. Could someone explain me if I not go over 83k to the end of tax year(5 April) can I count from zero and register in August(example I predicted I will have 83k in August 2017) or should I register from new tax year ( 5 April).
VAT threshold is counted on rolling 12 months basis not on fiscal or your own year end basis. Example you need to see past 12 months from today if you have to register and exempt supplies dont count towards registration threshold. Also if mostly supplies are zero rated then you might ask HMRC to let you off the hook for registration BUT you still need to keep an eye on matters as far as vat registration threshold is concerned
As @FaradayKeynes says the turnover calculation is based on a rolling period covering the most recent 12 months. If you hit the threshold in the 12 months up to the end of month X then you must submit your registration before the 30th of month X+1 and the effective date of your registration (when you have to start charging VAT) is the start of month X+2.
But don’t leave it til the last minute, it can take a while from applying to actually receiving your VAT number, and if you don’t have your number in hand by the first of month X+2 then you have the faff of having to re-issue invoices once you know your VAT number (all sales from the effective date are treated as including VAT, but you can’t itemise VAT on your invoices until you have a VAT number).
Thank you very much.
I predict I will be over 83k in April. It would be perfect to start together with tax year from 5th April. But what if in March I will go over 83k? Is is possible to change date of vat registration ? I would like to register now with date of 5th April to get Vat number and prepare my suppliers for this move.
I believe that if you are registering voluntarily before you hit the threshold, then you can ask for a specific registration date, but think carefully about whether it’s actually a benefit to your business to be registered sooner than you have to (if you hit the threshold during April your compulsory registration would kick in on 1st June).
Personally I’d be inclined to wait, as that staggers your various deadlines a bit better - your VAT quarters would end on 31st August, 30th November, 28th February and 31st May, whereas if you register from April then you end up with a VAT payment going out within a few days of your self assessment tax bill. But I’m not an accountant - talk to yours if you want advice specific to your own circumstances.
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Thank you Ian.
One more question.
If my Vat quarter starts from 1st June - is this date from when I have to make Vat Invoices? I import goods from Poland so is this date form my suppliers to start making 0% invoices?
Thank you very much. More questions soon:)
I believe that’s how it works, yes, but I would strongly recommend talking to a real accountant before you make any decisions around this. Now you talk about bringing goods in from Poland then it might actually be to your advantage to register sooner, depending exactly what the goods in question are and what VAT rates they attract in Poland and the UK.
I’m in a similar situation in my business, we buy various items of food and confectionery from Germany that all attract 7% German VAT - if I weren’t VAT registered then I’d “lose” 7% on the food (which I can zero-rate when selling it in the UK), but “save” 13% on the confectionery (which I have to sell at 20% VAT here).
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