Newsletter issue – August 2024
Do you own or work for a business that needs to register for VAT?
If so, you might find it of interest to learn that there's a new digital tool available to use online.
Launched by HMRC, the VAT Registration Estimator can help a business "to see what registering for VAT could mean", officials said. It was designed, following suggestions by small businesses, to help show a company when its turnover could require businesses to register for VAT and its effect on profits.
A business must register for VAT if its total VAT taxable turnover for the previous 12 months is more than £90,000. In that case, the organisation must charge VAT on 'eligible sales' and can usually reclaim it on eligible purchases.
According to HMRC, about 300,000 new VAT registrations happen each year. The estimator may be useful for businesses operating below the threshold and considering voluntary registration.
Karen Thomson, Administrative Burdens Advisory Board (ABAB) member, said: "I volunteered to be a tester for the new VAT tool. I am not a VAT expert so approached the experience as if I were a business with no knowledge of VAT.
"Having made some comments, along with other stakeholders, I have now used the final tool and find it very useful. I like that when you are asked for information there are examples, links to guidance where appropriate and help on completing the boxes."