Four Benefits Of Voluntary VAT Registration For Small Businesses
Businesses within the UK are required by law to complete VAT registration with HM Revenue & Customs (HMRC) if their annual turnover is above the £85,000 threshold. If a small business doesn’t earn above the £85,000 threshold, then it doesn’t need to register for VAT. However, many small businesses getting contractor accounts performed by a good tax return accountant will often be advised to voluntarily register.
There are a variety of benefits behind why these small business owners are being advised by their accountants Sussex way to register for VAT. The first benefit for doing so is perhaps the most obvious one. Registering for VAT is a pre-emptive measure against avoiding any financial penalties. If, for some reason, your turnover spikes above the £85,000 VAT Registration Threshold and you don’t notice, you will likely be receiving a letter from HMRC. If you go over the threshold, you have 30 days to register VAT with HMRC. If you don’t do this, you will receive a penalty. It doesn’t matter if you did so unwittingly; the rules are clear. So by registering, you are stopping this situation from arising. The second benefit relates to the possibility of receiving VAT refunds. If you are buying a standard rate VAT product or products for your business, then you’ll be able to claim for VAT refunds. This is even the case if you are selling a zero rated VAT product. So these are just a couple of the direct ways in which a UK contractor accountant can help small businesses when it comes to voluntary VAT registration.
However, there are also a number of other benefits that many small business owners may not think of due to not having as much experience with matters relating to VAT. However, this is exactly why contractor accountant recommendations are so important to small businesses that don’t have financial advisors on their staff. One benefit relates to the boost that a business can receive to its profile by being VAT registered. By voluntary registering for VAT, you could give the impression to any potential clients that your business is bigger than it is. This can be an important tool in your arsenal against those bigger companies within your industry who tend to sweep up your potential client base. By being VAT registered, you will receive a VAT registration number which you can place on your website, lettered or email correspondence, and on any stationary or advertising material. Following on from this, another benefit relates to the fact that there are many businesses out there that just won’t deal with smaller businesses that haven’t been VAT registered. Again, your VAT number demonstrates that you have been VAT registered via your contractor accounts manager.
So these are just some of the benefits that your business will receive from voluntary VAT registration via an advisor who can also perform contractor accounts. Just as it’s important to receive tax return help, it’s also important to receive help from chartered tax advisers and accountants when it comes to VAT registration.