VAT and Ltd company?

Question

I have registed a Ltd company to start business but rather unsure wehter I am going to hit the VAT registration threshold. As it is a Ltd company should I still register for VAT?

Answer 1

It also depends on your nature of trade and who your customers will be.

If, for example, all your customers are vat registered businesses then you should register for vat as it is no detriment to your customers and you will be able to claim the vat back on any expenses.

If you're selling to the general public, then you should avoid registration until you have to

Answer 2

It may be advantageous if you make a lot of vatable purchases for the business

Answer 3

The necessity to register for VAT depends, as you obviously realise, on the size of your turnover. It makes no difference, however, whether you trade personally or through your limited company.

Inland Revenue and Customs would probably advise you to register any way, if you are unsure of the level of turnover you ar likely to reach, since there is a possibility of reaching the threshold. Although VAT returns are a bit of a drag to complete, (how much of a drag depends on the nature of your business), and nobody likes unnecessary bureaucracy, it's probably a good idea to register, just in case. If, after a couple of quarters, you find that you are nowhere near the VAT threshold, you can always deregister.

I have found that, despite their reputation as the 'dreaded VAT man', the Customs guys are generally helpful and reasonable as long as you are straight with them. Why not have a word with the VAT office and get their advice?

Answer 4

It's entirely up to you: You can register when you hit the threshold if you like, they're very quick in issuing VAT numbers. It should work out cheaper & easier for you not to register at first, unless you sell to a lot of businesses, most of whom don't like dealing with companies not registered for VAT.