A common question amongst small business owners is whether or not they should register for VAT and what is the Vat Threshold? Hopefully, this guide will help you make up your mind about VAT Registration Threshold.
Am I legally obliged to register?
If your turnover (total sales) in the previous 12 months exceeds the compulsory registration threshold (currently £79,000), then yes – you must register. Failure to do so can result in fines. If you are using online software such as XERO will keep an eye on this for you and warn you if you approach the threshold. It’s important to note that this is on a rolling 12 months basis (ie, the last 12 months from any given point), not based on turnover in a calendar year.
If you haven’t exceeded the threshold for compulsory registration you can still register voluntarily if it makes sense for you to do so.
VAT Registration Threshold and Deregistration Thresholds
- The VAT registration and deregistration thresholds will not change for 2 years from 1 April 2018.
- The taxable turnover threshold which determines whether a person must be registered for VAT will remain at £85,000.
- The taxable turnover threshold which determines whether a person may apply for deregistration will remain at £83,000.
The registration and deregistration threshold for relevant acquisitions from the other EU Member States will also remain at £85,000 whilst the UK is a member of the EU.