Hello everyone,

Recently I have successfully registered as a sole trader. A dear friend told me that I could register for VAT, and that this would have added advantages. However, as far as I know I shouldn't register for VAT until I reach a turnover of £77.000.

Can I register for VAT, and what would be the added advantages?

Thanks

Hi Gamble,

Welcome to Wholesale Forum

VAT registration is required for UK businesses with a taxable turnover above the £77.000 turnover threshold, however you can also register your business for VAT voluntarily. In many cases it is NOT advantageous for a business to register for VAT in advance, however there are indeed advantages if you decide to register your business for VAT in advance. Have a look at some of the advantages explained below:

• Enhance your business image

Most people are aware of the VAT registration threshold, therefore any business registered for VAT is seen as a more successful business and will be preferred over a non VAT registered business. So voluntarily registering your business for VAT can help give the impression that you are a professional and successful business. You will receive a VAT registration number which you can display on your business website, stationery and correspondence this will further help you create a professional image for your business.

• Increase your sourcing success

Some suppliers are unwilling to deal with businesses that are not registered for VAT. You will also need a VAT number when buying stock from suppliers based outside the UK. Therefore, registering your business for VAT can widen your options when it comes to sourcing stock.

• VAT refunds

Voluntary VAT registration allows you to claim VAT on goods and services acquired for your business, you may actually receive money back from the HMRC in VAT refunds! You may also reclaim VAT from the last 4 years. So if you have already made business purchases you can reclaim VAT on them, as long as you have kept proper VAT records on all your invoices.

And finally;

• Avoid a financial penalty

By voluntarily registering your business for VAT you won’t have to worry about passing the threshold and notifying HMRC in time. If, for any reason, you go over the threshold without notifying the HMRC, your business may have to pay a significant fine.

If you want to find out everything there is to know about VAT and registering your business for VAT, we suggest having a look at the following link from the HMRC website:

• HM Revenue & Customs: VAT

Hope this helps

Hello, I have read the above post and am unsure about something.

If I register for VAT, but do not have a turnover > £77.000, do I still have to charge my customers VAT?

Hi,

The advantages of registering voluntarily are:-

• Avoiding Financial Penalties:-The obvious advantage of voluntary VAT registration is you won’t have to worry about passing the threshold or notifying HMRC in time.
• Boosting Your Business Profile :-Voluntarily registering your business for VAT might give the impression that your business is bigger and more successful than it actually is.
• Easing Business Dealings:-The advantage of voluntary VAT registration is you will be issued with a VAT registration number and can more easily deal with external businesses.
• VAT Refunds:-Another advantage of voluntary VAT registration is the ability to claim VAT on goods and services purchased for your business.
• VAT Registration Number:- Voluntary VAT registration means you’ll get a VAT registration number.