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VAT Registration

 There are two common mistakes when a company should register for VAT.

The first is the time frame; you should calculate in a rolling 12 months period and not the end of the fiscal year. 

For example, if your company has registered on 31/10/2015, do not calculate your turnover between 01/11/XX-31/10/YY because you may exceed the threshold on the period 01/12/XX - 30/11/YY. At that point, you should register for VAT. https://bit.ly/3kKYBh0

The second common mistake, which does not occur penalty but only bureaucracy, is how you calculate your taxable turnover.

  • You should include the UK sales, goods you hired or loaned to customers
  • business goods used for personal reasons
  • goods you bartered, part-exchanged or gave as gifts
  • services you received from businesses in other countries that you had to 'reverse charge.'
  • building work over £100,000 your company did for itself

Include any zero-rated items - only exclude VAT-exempt sales and goods or services you supply outside the UK.

In other words, if you sell services within the UK worth 10,000 Pound and export services in the USA worth 150,000 Pounds, you don't need to register for VAT.


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