Should i register for vat or not?!?!?!?

Just started a little business and making Â£200 to Â£250 per wk. Should i register for vat or not and would i benifit from it?? Am paying tax & NI.
Thank u!!!

You have to earn over Â£54k a year

You don't say what type of business you are running therefore the following information is not specific to you. For example, some businesses may make exempt supplies and not be able to reclaim any or all VAT charged to them.

This is a hugely complex subject and your question cannot be properly answered on this type of forum. It is strongly recommended that you seek professional advice and therefore I cannot/will not be held responsible for you either taking or not taking any action based on what follows. If that is unacceptable to you, you and anyone else reading this are directed to ignore the rest of this posting.
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Firstly, when you state you are making Â£200-Â£250 per week, is that profit or turnover. Turnover is your sales or work done. Profit is what is left over after deducting the day to day expenses of running the business from the turnover, in simplistic terms.

Most of the answers given are well wide of the mark and highly misleading.

The facts:

With effect from 1 April 2006, the previous rates being effective from 1 April 2005, a person will have to apply for VAT Registration if at the end of any calendar month the amount of taxable supplies made in the past 12 months (or less) has exceeded Â£61,000 or it is believed that the amount of taxable supplies over the next 30 days will exceed Â£61,000.

However, although a person's taxable supplies may have exceeded Â£61,000 over the past 12 months, registration will not be compulsory if it can be shown that the figure will not exceed Â£59,000 over the next 12 months.

Even if turnover is not expected to exceed the future threshhold of Â£61,000, it may still be advantageous to make a Voluntary Registration if input tax on purchases is likely to exceed output tax on sales or work done. The difference could be reclaimed.

The maximum penalty for not registering within the time limits, whch is 30 days after the end of the month that the threshhold was breached, is not jail, as suggested elsewhere, but 15% of the net tax payable. The amount can be mitigated but is not usually lower than 5%.

Sadly, the information from the person who works for the Inland Revenue is indicative of the poor advice meted out by the government and their Advice Lines. There is no substitute for professional advice offered by an accountant or tax adviser with Professional Indemnity Insurance. Yes, there is extra paperwork involved but to suggest not registering voluntarily based on that alone is foolish and could be costly.

It is correct, however, that self-employment must be registered with the Inland Revenue. This must be done within 3 months of the end of the month that trading started. e.g. If trading commenced on 12 July 2006, the Inland Revenue (or HM Revenue & Customs as they are now known) must be informed no later than 31 October 2006, failing which there is a penalty of Â£100.

I should be happy to answer any further questions on or off forum but as I said at the beginning, you really must seek professional advice. As an accountant in practice, all too often I see new clients after they have taken or not taken an action. That too can be costly.

Sorry this is so long but tax is rarely straightforward.

depends on wot services ur business offers
u dont actually need to register till u earn over Â£61000 a year
but if ur services are zero rated then it would be benifical for u to register as u will recieve refunds

I work for Inland Rev and you needn't register until earning over Â£56,000 per yr. You can register on a voluntary basis but to be honest with the paperwork involved it doesn't make much sense. You DO need to register for self employment tho unless a Ltd Company. Telephone number is 0845 915 4515

So when you've read all that advice and the usual caveats...... geesh, talk about making a mountain out of a molehill.

If you call the HM Customs & Excise, they are always extremely helpful and can arrange for someone to visit you to talk about it.
They are not there just to bash doors in and confiscate booze - that's just hyped up for entertainment.

I ran my own business for a number of years and nothing has to be done instantly, assuming you are talking turnover and have just started, which I can guess from your question, is the most likely case.

The HM C&E are not stupid and can help you make the choice. You can always call in the professional advisors later. To be honest, if you do register, once you've done a VAT return the once, it's a doddle thereafter. It is way easier than mucking about with PAYE, that's for sure.

Keep your records and paperwork spotless, call them within the next few days and READ ALL THE LEAFLETS they send you.

Good luck with your business,
bw

You have to anticipate profits of Â£70,000 before registering for VAT.

I wouldn't bother. And you don't have to be earning a specific amount either, there is an amount you can earn where you would have to register but what you are quoting doesn't reach it.

yes,,, you can go to prison if you don't

dont register for vat, u will make more headaches for yrself, the turnover for vat regisration is Â£63,000 per year

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