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VAT Registration

Updated: Jul 28, 2021

Companies that already cooperate with other VAT companies or who want to expand their activities with such companies often decide to register for VAT.

Organizations registered on VAT are more willing to cooperate with the same companies due to the possibility of deducting the VAT in costs (input Vat).

Zeznanie Vat

Who needs to register for VAT?

In Tax Year 2019/20 Vat threshold is £85,000. In the 2020/21 tax year, this amount remains the same.

If your company exceeds the VAT threshold within the last 12 months, it must register for VAT. This should be done as soon as possible and no later than within 1 month.

Voluntary registration

If your income is below £85,000, you can voluntarily register for VAT.

VAT deregistration

To be eligible for VAT deregistration, your turnover must not exceed £83,000.

What does VAT registration mean?

When you register for VAT, you must file VAT Returns to HMRC. As a rule, you do it quarterly, i.e. every 3 months and pay overpaid VAT or receive a refund. Whether we get a refund depends on our costs. Read on to learn how.


How we calculate VAT?

The invoices issued by us give us the output VAT, while all costs are input VAT.

If the output Vat is higher than the input VAT, the differences must be returned to HMRC. You have 1 month and 7 days do pay your VAT.


Period from September to November:

You sold the goods for the amount of £4,800 including VAT £800.

Your costs are £1,200 including VAT £200.

The difference is £800 - £200 = £600

You must pay VAT of £600 to HMRC no later than January 7th.


Period from August to October:

You sold the goods for a sum of £6,000, including £1,000 VAT

The company's costs were £7,200, including £1,200 VAT.

There is £200 VAT overpaid (£1,000 - £1,200 = £200) and it will be refunded by HMRC to your company.


Who can issue a VAT invoice?

VAT invoice can only be issued by a company that is registered for VAT.

If you are not a VAT taxpayer, you cannot issue a VAT invoice!

What data must be included in the VAT invoice:

VAT Invoice - Sample

1. Company name

2. Company address

3. Company vat number

4. Client name

5. Customer's address

6. Invoice number

7. Date

8. Description of the service / goods

9. Net value of the service / goods (amount excluding VAT)

10. Vatu rate (0%, 5% or 20%)

11. Gross value of the service / goods

12. Total net amount

13. Total Vatu amount

14. Total Gross Amount


Have any questions or concerns?

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