The benefits of being VAT registered

If you’re a business owner, you should carefully consider registering for VAT. While it may be necessary for some businesses to register for VAT once they attain a certain turnover threshold, other companies still have the choice.

In this piece, we will explore some of the benefits of registering for VAT, including when you need to file a confirmation statement, and how it can help your business in the United Kingdom. But before we get into that, let us explain where to start.

When should you register for VAT?

If your business turns over more than £85,000 in any successive 12-month cycle, you’re required to register for VAT by the following calendar month. To ensure that your business remains above board and does not illegally make more than £85,000 without being VAT registered, you must keep meticulous records. One reason for this is that the amount is based on turnover and not profit. This means that some smaller businesses may go over the threshold without even knowing.

On the other hand, if your business makes less than £85,000 in a 12-month cycle, you will have the option to register VAT or not.

Benefits of registering for VAT

Some business owners may not see the value of voluntarily registering for VAT as, after all, it is a tax. However, there are several advantages of VAT registration, some of which include:

Reclaiming VAT

If you register for VAT, you will reclaim VAT on all the goods and services you purchase. Input tax refers to the tax you pay on goods and services, whereas VAT is the output tax you charge. If your input is higher than your output, you will be able to claim it back through the HMRC. This means that if your company wants to invest in heavy and expensive equipment, being VAT registered will prove beneficial.

Increased cash flow

Whenever you charge more for your goods and services, you can expect to see a higher rate of cash flow in your business, which is something investors like.

More companies and clients will want to work with you

Many buyers, lenders, suppliers, and clients will only work with VAT-registered companies. So, by acquiring such registration, you will open new doors for your business and create connections that will help you to achieve your goals.

It helps to create a good impression

Smart business owners realise that there is something professional and impressive about being VAT-registered. It makes your company appear more trustworthy and legitimate as it creates a good impression.

Summary

If you want to register for VAT voluntarily, or if you happen to fall within the necessary threshold, you can begin the process by registering for VAT on the HMRC website. You can also write to them using their VAT1 form. You must also ensure that you have all the necessary business details, such as bank statements and turnover. Once you complete the registration process, you will receive an official certificate from HMRC, which usually arrives within two weeks. Being VAT registered can also open your business to some of the advantages of cash flow forecast. 

For more information on VAT registration, contact Harper James Solicitors and their team of lawyers for startups and more.


What next?

Please leave us your details and we’ll contact you to discuss your situation and legal requirements. There’s no charge for your initial consultation, and no obligation to instruct us. We aim to respond to all messages received within 24 hours.

  • This field is for validation purposes and should be left unchanged.

Your data will only be used by Harper James Solicitors. We will never sell your data and promise to keep it secure. You can find further information in our Privacy Policy.

Our offices

A national law firm

A national law firm

Our commercial lawyers are based in or close to major cities across the UK, providing expert legal advice to clients both locally and nationally.

We mainly work remotely, so we can work with you wherever you are. But we can arrange face-to-face meeting at our offices or a location of your choosing.

Floor 5, Cavendish House, 39-41 Waterloo Street, Birmingham, B2 5PP
Stirling House, Cambridge Innovation Park, Denny End Road, Waterbeach, Cambridge, CB25 9QE
13th Floor, Piccadilly Plaza, Manchester, M1 4BT
10 Fitzroy Square, London, W1T 5HP
Harwell Innovation Centre, 173 Curie Avenue, Harwell, Oxfordshire, OX11 0QG
2-5 Velocity Tower, 1 St Mary’s Square, Sheffield, S1 4LP
A national law firm

To access legal support from just £125 per hour arrange your free no-obligation initial consultation to discuss your business requirements.

Make an enquiry