If you are in business and your turnover exceeds £83,000 in a 12 month period then you will have to register for vat. Please remember the point in question is your Turnover NOT your Profits or your Wages and it’s a rolling 12 month period. Therefore each month’s turnover until you have 12 in the list then add the thirteenth month whilst taking off the first month so you have a rolling 12 months turnover and it’s that figure that you have to watch in case it exceeds £83,000. I can’t stress enough that it is your turnover you record and keep an eye on and the £83,000 is the threshold from April 2016.
You don’t have to wait 12 months so if your turnover exceeds £83,000 after 8 months you have to register then.
So whichever month your turnover exceeds the registration limit you have the following month to register and you will be given a registration date of the 1st day of the next month.
So if your turnover exceeds £83,000 in May 2016 then you have the month of June 2016 to register and you will be given a vat registration date of 1st July 2016.
These are the circumstances whereby you HAVE to register for vat but if you think it will be beneficial for you to register for vat before you reach the threshold then you can register whenever you want. Why would you want to register if you don’t have to? Well if for instance you are dealing with solely vat registered businesses then they will be able to reclaim the vat you will charge. But if you were vat registered then you could reclaim the vat charged to you on your purchases and your overheads.
It may well be in your best interests to register early and this is one of the questions that your Accountant will look at for you and it’s a decision that you should take only if you have sought professional advice.
So if you are in business and you are not vat registered ask your accountant whether you would be better off if you registered even though your turnover is below £83,000.