Chapter 2: VAT Registration

Question 1

What is the VAT registration threshold for a business?

Answer 1

£90,000 taxable turnover a year

Question 2

When must a business register for VAT other than when they reach the threshold and what is this test called?

Answer 2

If they believe taxable supplies made in the next 30 days will exceed £90,000, this is called the historic test.

Question 3

How many registrations are required for…

Answer 3

Sole traders - one covering all businesses
Partnerships - one covering all partners
Companies - one per company

Registrations are separate, i.e., a sole trader and their company need separate VAT registrations

Question 4

What three things does a business receive after registering for VAT?

Answer 4

1. A VAT registration number
2. Confirmation of registration date
3. Information about when to submit the first VAT return

Question 5

What are the five things a business has to do after registering for VAT?

Answer 5

1. Charge VAT on all taxable supplies
2. Issue tax invoices to other registered traders
3. Submit vat returns to HMRC
4. Keep records
5. Recover input tax invoices most purchases and expenses