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VAT query

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I am guessing there are some of you out there who are self employed and might be able to help me.


If you volunteer to be VAT registered do you have to charge VAT to your customers or not? It looks like you do on the HMRC website, but it is not clear, and if you do have to charge VAT what is the advantage of being registered if your turnover is less than the threshold? (as surely VAT paid out on stock/supplies will always be less than VAT charged on final product?)


I had (wrongly?) assumed that volunteering for VAT registration would mean one could claim back VAT paid on stock/supplies and just submit VAT returns when required.


I think this may be a rather large can of worms :shock:



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Once you are VAT registered you will need to charge all of your customers VAT all of the time. The plus side is that you can claim back the VAT on just about all of your business purchases, so basically you are saving the VAT on what you buy (for the business). The returns have to made quarterly. If it's just a small business, then it's fairly simple to do it yourself, but it can get onerous for a larger business and require the services of a good book-keeper.

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Ditto what Jools has said.

We are VAT registered,& I do the VAT every quater - its pretty easy,but time consuming.


The plus side is that we can claim back for lots - stationary,clothing,etc in the name of the company.


If you are under the threshold,I wouldn't register myself......but you may well get more inspections to check that you are in fact under the threshold :?

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ditto Sarah and Jools.


The other advantage is that if you are, or will be, near the threshold and would then have to start charging VAT then it is easier to start straight away. That way you don't suddenly have to start charging your customers when they haven't been charged VAT previously and if you have stationery printed, then it doesn't need changing.

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