Downsides of VAT registration
Registering for VAT means that you have to charge VAT on top of your invoices. This means that, if you previously sold a service for £500, you would need to invoice £600 once registered – £500, plus 20% VAT. If your customers aren’t VAT registered, either they will need to swallow the increase or you will need to take a hit to your bottom line.
What do I need to do when I’m VAT registered?
Each quarter you will need to submit a VAT return to HMRC – this can only be done online. This will show the total VAT you have charged to your customers, on goods and services. If registered with a contractor accountant, they will take care of your VAT returns for you.
You will also need to include the VAT you have paid when purchasing goods and services. When VAT registered, it is possible you will be able to reclaim some of the VAT paid. Have a look at our Flat Rate VAT guide for more details.
Once submitted, you will need to pay the difference to HMRC, if your VAT output exceeds your VAT input. If the reverse is true, your company is entitled to a refund.
We hope you found this guide useful. If you still have questions about VAT or would like to know if it is beneficial to register for VAT, please call us on 01442 795 100 or email jaime.thorpe@dolanaccountancy.com.
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Downsides of VAT registration
Registering for VAT means that you have to charge VAT on top of your invoices. This means that, if you previously sold a service for £500, you would need to invoice £600 once registered – £500, plus 20% VAT. If your customers aren’t VAT registered, either they will need to swallow the increase or you will need to take a hit to your bottom line.
What do I need to do when I’m VAT registered?
Each quarter you will need to submit a VAT return to HMRC – this can only be done online. This will show the total VAT you have charged to your customers, on goods and services. If registered with a contractor accountant, they will take care of your VAT returns for you.
You will also need to include the VAT you have paid when purchasing goods and services. When VAT registered, it is possible you will be able to reclaim some of the VAT paid. Have a look at our Flat Rate VAT guide for more details.
Once submitted, you will need to pay the difference to HMRC, if your VAT output exceeds your VAT input. If the reverse is true, your company is entitled to a refund.
We hope you found this guide useful. If you still have questions about VAT or would like to know if it is beneficial to register for VAT, please call us on 01442 795 100 or email jaime.thorpe@dolanaccountancy.com.
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