Value added tax (VAT) is the tax which is applied at different good and services produced. VAT registration is required for the business trading or manufacturing goods. This is defined as the continuous process of manufacturing goods or services and getting paid for it. You will follow the VAT registration process for your company only when the turnover of your business is more than £77,000 (this amount may vary from time to time).
When to register:
There are two ways which can be followed to get your company registered.
Voluntary VAT registration:
A company can get the VAT registration voluntarily if the total value of the supplies is less than the specific amount of VAT. But the turnover should not be less than half of the amount in the last 12 months.
Compulsory VAT registration:
The company needs to get the VAT registration if the total value of the taxable goods and services exceeds the specific amount in any of the twelve consecutive month periods. An individual needs to fill up a form i.e. VAT 101 – Application for Registration form, to complete the registration process. This form should be submitted within the period of 21 days after exceeding the turnover.
Process of VAT registration:
Getting a VAT registration for your business is not a lengthy task. You need to follow some step.
- Get the application for VAT registration, fill and attach all the required documents with the form. Don’t leave any blank space to avoid any future issues. You can submit the application in any of the VAT offices. Pay the required fee along with the application.
- After the submission of the application, the local VAT office will conduct a survey near the company within three days of the submission.
- After the payments of the fees and clearance of all issues, the certificate will be issued to the company along with the VAT registration number.
You can also get the Online VAT registration of your company. The online process is simple and easy. You can register your business online separately or you can join a group in which different companies are getting a same VAT identification number. After getting yourself registered online, create an account. For Online VAT registration, you can also appoint an agent or accountant who will take care of this registration process on your behalf. After you receive a Vat number, you can use it to sign up for the VAT account.
After the completion of VAT registration process, you need to complete a VAT return and then transfer the details to the HMRC. This process needs to be followed once a quarter which will show the exact amount of Vat charged on the sales invoices and how much VAT is charged in with the supplier invoice. By getting an Online VAT registration, you can provide the Vat return details to the HMRC website online.