Guide: How to Register for VAT in 2023?

WHAT IS VAT?

VAT, or Value Added Tax, is a tax charged upon the price of goods and services in the United Kingdom. Moreover, the standard rate for VAT is 20%; however, this rate is reduced to even 0%, “ZERO,” depending on the nature and category your business falls into as specified by HM Revenue & Customs.

WHO NEEDS TO REGISTER FOR VAT? WHAT IS THE VAT THRESHOLD FOR 2023?

Basically, if you are a business that is based in the UK, and your annual turnover is greater than £ 85,000, so you are required to register for VAT. However, if your annual turnover is below £ 85,000, you can voluntarily register for VAT to get VAT Reclaims and other benefits. Furthermore, if you are a Non-UK business, but you sell your goods or services in the UK, you are also required to sign up for VAT. For more information, visit our video guide on registering for VAT in the UK as a Non-UK Business.

WHAT ARE THE DIFFERENT VAT PERCENTAGES AND EXEMPTION POLICIES?

As specified by the HM Revenue & Customs, three major VAT percentages; are charged as per the nature of the goods/services sold. These include:

VAT Rate	Percentage	Examples
Standard	20% (Most Goods/Services)	Almost all Goods/Services
Reduced	5% (Some Goods/Services)	Home Energy, Nicotine Patches, Gum, Radiators, etc
ZERO	0% (ZERO Rated Goods/Services)	Most Foods, Children’s Clothes, Health Services, Pamphlets Printing, etc.
Exemption	Not Charged (Exempted Goods/Services)	Charitable Fundraising Events, Betting, Gaming, Lottery Tickets, etc

VAT Rate	Percentage		Examples
Standard Rate	20%	Most Goods/Services	Almost all Goods/Services
Reduced Rate	5%	Some Goods/Services	Home Energy, Nicotine Patches, Gum, Radiators, etc
ZERO Rate	0%	ZERO Rated Goods/Services	Most Foods, Children’s Clothes, Health Services, Pamphlets Printing, etc.
Exemption	Not Charged	Exempted Goods/Services	Charitable Fundraising Events, Betting, Gaming, Lottery Tickets, etc

Almost all businesses in the UK are legally required to register for VAT; however, many business categories are charged at a reduced rate, zero rate, or even exempted from VAT. These include food, newspapers, printed books, other items, medical goods/services, charities, non-profits, etc. For more information, visit HMRC’s List of exempted goods/services.

Moreover, HMRC has various Special VAT Schemes, such as the VAT flat rate scheme to encourage small, local businesses, providing them with an exemption from VAT and simplifying accounting processes and documentation.

Lastly, even if your business is exempted from VAT registration, you can still be asked to submit VAT returns as per HMRC in certain special circumstances; thus, maintaining documentation for record-keeping purposes would be a good idea. Are you looking for accurate advice from experienced accountants/tax advisors? Book a free meeting today with Octa Accountants.

HOW IS VAT CALCULATED? IS THERE A VAT CALCULATOR?

Yes. Zoho Finance has developed a free, state-of-the-art tool known as the VAT Online Calculator. This tool is credible and authentic; however, it only provides an expected range using various assumptions. Hence, even with VAT UK calculator, there is a possibility of an error; thus, it is advised to contact certified accounting experts.

HOW TO REGISTER FOR VAT IN THE UK IN 2023?

The VAT registration process is to be carried out online through the HM Revenue & Customs website, using the following steps after using a VAT calculator and consulting a tax advisor:

Sign up for a Government Gateway Account
Register for VAT using these documents:
- Business Name, Address, Contact Details
- VAT Accounting Scheme Details
- Annual Business Turnover Details
Wait for the Registration Certificate

After submitting your application, you might experience a delay in getting your VAT Number from HMRC. However, you can only show charged VAT on your invoices once you are assigned your unique VAT Number. Nonetheless, for any sales made during the said period, you will be legally required to pay VAT for any sales made.

WHY HIRE OCTA ACCOUNTANTS FOR VAT REGISTRATION IN THE UK IN 2023?

Experienced & Certified Accountants: Our accountants are not only trained as per international standards but are certified by top institutions as well; thus, they have a deep understanding of all laws and regulations in the UK.
Time-saving & Peace of Mind: Registering and filling for VAT in the UK is a highly time-consuming task as you would have to search from various resources regarding what VAT Scheme may be applied to you/do you meet the criteria for exemption? Free up your time, handle other important business matters, and let us handle this for you.
Accuracy & Long-Term Planning: Incorrectly filling your VAT would result in fines and penalties for your business; thus, your VAT returns must comply with HMRC regulations. We can plan your VAT fillings by structuring your transactions to minimize VAT liability and save you money in the long run on VAT Payments.

Hence, Partner with Octa Accountants for VAT Registration, and Filling to save your precious time, and money by being compliant with HMRC regulations