How do I register my business for VAT?
If you're required to register your business for VAT based on your annual turnover, or you would like to register voluntarily, there are a few steps you’ll need to take.
First, you'll need to gather the relevant information. This includes:
- Your National Insurance number (or equivalent)
- Business bank details
- Annual turnover
- Business activity
- Details of incorporation
Most businesses are eligible to register their business online, but those who can't will need to submit their registration by post using a VAT1 form. If you're registering a partnership for VAT, you must also submit a VA2 form to provide details of all the partners involved.
It’s worth registering online promptly, as most businesses are required to submit quarterly VAT returns via their online account. Alternatively, you can appoint an agent to register and submit VAT returns to HMRC on your behalf.
A registration certificate should be issued to your VAT online account or by post within 30 working days (complex cases can take up to six months). This confirms your VAT number and your ‘effective date of registration' – this is either when you crossed the turnover threshold for compulsory registration, or when you requested voluntary registration. You'll also be informed about when you need to submit your first VAT return and payment.
Until you receive your certificate, you won’t be able to show VAT on invoices. You will, however, have to pay the VAT during this waiting period. To allow for this, you should adjust your prices and keep careful accounts for the interim. Once you have your VAT number you can reissue any invoices including the updated VAT.
How do I deregister for VAT?
What are the best tools for VAT record keeping?
Keeping accurate and up-to-date VAT records is an essential part of running a successful business.
If you're using your online account, you may want to use accounting software that lets you submit your VAT return directly, rather than having to enter your figures manually into HMRC's online service. There are many different programs to choose from, so it's important to find the one that's right for your business. A list of suggested software programs can be found on the gov.uk website.
Under the new Making Tax Digital scheme, all businesses over the turnover threshold for compulsory registration must keep digital records and submit digital VAT returns using compatible software, rather than using the online service. This requirement will be extended to include businesses below the turnover threshold in April 2022, so it's important to get your business prepared sooner rather than later. You can find out which software packages are compatible with Making Tax Digital here.