Businesses have to register for VAT as soon as the turnover exceeds £77,000. A common misconception is that this is measured by reference to the annual accounts. However, it is actually measured on a rolling 12 month period. Once the registration is level has been exceeded, registration has to be done withing 30 days thereafter. HMRC will then register from the first day of the next month.
HMRC have integrated their self assessment and VAT intelligence. So if a businees that has not registered for VAT but submits a tax return showing turnover above the threshold HMRC are likely to pick this up, in which case there would be penalties which are normally between 15% and 30%.
Why not speak to us at Tuchbands if you believe you should be VAT registered.
Written by Philip Woolfson
Philip is a Senior Partner of Tuchbands, a dynamic firm of North London accountants based in Golders Green. Philip has handled accounts and taxation for a wide range of industries, from property investment through to the fashion industry and in his 35 years has helped hundreds of businesses to thrive in both rising and falling markets.