You must register once you’ve hit the £85k threshold (the VAT threshold for the 2017/18 tax year) – it’s a legal requirement.
So keep an eye on your current turnover and your forecasted turnover to see if you’re getting close to the magic £85k. This isn’t a fixed period, like the tax year, but a rolling 12-month period that could run from January to December, February to January etc., so you must pay close attention to your turnover numbers at all times.
When it looks like you’re getting close, start planning ahead and give yourself time to sort out the registration process. And be aware of the 30-day rule: if you’re expecting the value of everything you sell in the UK which isn’t VAT-exempt in the next 30 days alone to be over £85,000, you must register straight away.
If you only just scrape over the threshold, you could apply to HM Revenue & Customs (HMRC) to see if they will allow you to opt out of registration. It’s an option, but it’s unlikely to be listened to unless you can demonstrate you’ve been under the threshold for a prolonged period.
As a general rule, accept that you’re going to have to register as soon as you get close to £85k – so keep tabs on your turnover and plan ahead.
HMRC are very proactive about checking if you’re registered. They will make a judgement on your turnover and can issue you a notice to provide evidence that you’re NOT over the threshold. If you’re found to be over the threshold and not registered, there are some fairly stiff penalties to pay out – so make sure you’re in the ball.
If you’re unsure whether registering for VAT is the best move, give us a call on 01454 300 999, or drop an email to firstname.lastname@example.org