HMRC has launched a new online tool to help businesses estimate what registering for VAT may mean for them.
A business must register for VAT where the value of its 12-month rolling annual taxable turnover exceeds a threshold of £90,000. However, businesses can voluntarily register for VAT if it is advantageous to do so and their value of taxable turnover is below £90,000.
To learn more about when your business should register for VAT, click to read our blog: ‘When should I register my company for VAT?’
What is the VAT Estimator tool?
The new VAT Registration Estimator tool is designed to help businesses understand the implications of registering for VAT. It allows you to estimate both the VAT that might be owed and the VAT that might be reclaimed upon registering. The tool can be used multiple times to compare different scenarios, providing valuable insights into what to expect.
The tool remains highly beneficial for businesses operating below the VAT threshold, especially when considering voluntary registration. Additionally, the tool can assist in evaluating whether deregistering for VAT is advantageous. It is important to note that the deregistration threshold is currently £88,000, slightly lower than the registration threshold of £90,000.
You can access the tool by clicking the link below: https://www.gov.uk/guidance/check-what-registering-for-vat-may-mean-for-your-business
How to use the VAT Estimator tool?
The VAT Registration Estimator will provide guidance to help you determine whether registering for VAT is right for your business by allowing you to experiment with different inputs and outputs. While it cannot provide bespoke business advice, it can give useful guidance. To use the tool effectively, you will need to gather and input the following information:
- Estimated income and costs for the chosen time period
- Applicable VAT rates for income and expenses. Click on the guidance link below to help you choose the correct rates. https://www.gov.uk/guidance/rates-of-vat-on-different-goods-and-services
How HB&O can support you
If you believe your business should be registered for VAT or would like to become VAT registered but need additional support, please do not hesitate to contact our in-house VAT department. A team member will be able to talk you through the registration process and the options available to you under the registration regulations.
Email: [email protected]
Phone: 01926 422292
