A company is required to register for VAT if its turnover for the previous 12 months is above £82,000. This is known as the VAT registration threshold. It is compulsory to register either when you reach the threshold or if you know that you will. The VAT registration threshold is based on your company’s VAT taxable turnover (the total of your sales that aren’t VAT exempt).
The law clearly states that you must register within 30 days of your company’s turnover exceeding the threshold, if a company registers late, you must pay what you owe from when you should have registered. Depending on how late the registration is and on how much you owe, you may incur a penalty.
A company can apply for a registration exception if its taxable turnover only temporarily exceeds the threshold. In order to do this, you would need to write to HMRC and provide evidence of why you believe that your taxable turnover will not exceed the threshold over the next 12 months.< Back to FAQ's