• The current compulsory VAT registration figure is sales in excess of £73,000 in any twelve month period.
• Date of VAT registration:
• If you exceed the annual total sales this month, the date of VAT compulsory registration date will be the first of the month after next.
• If you purchase a business with past sales in excess of £73,000 per year this will be a compulsory VAT registration.
• Late filing of VAT returns or late payment of VAT will result in penalties and interest.
• Penalties are on an increasing percentage basis for repeated lateness; from 2% to 15% of VAT payable.
• If you apply for registration after the compulsory VAT registration date there could be an accumulation of interest and penalties.
• HM Revenue & Customs routinely check that compulsory registration for VAT has been applied from the correct date.

• You may apply for voluntary VAT registration at anytime before reaching the limit.
• Paying voluntary VAT is beneficial if all of your customers are VAT registered. You can claim VAT applicable to your costs.
• The downside is that you need to do quarterly VAT returns.
• Voluntary registration for VAT may be beneficial to apply for the flat rate scheme in which you collect 20% on your sales and pay to H M Revenue & Customs at a lower rate on sales but do not claim actual VAT on purchases except assets costing over £2,000 for which VAT may still be claimed.

How to do compulsory VAT registration or voluntary VAT registration.

To Register you need:

• Trading address.
• Actual or expected date of starting to trade.
• If you are intending to trade from serviced offices this may cause HM Revenue & Customs to scrutinize the application more carefully.
• If you have not made any sales at the date of application you may need to show evidence of intention to trade such as purchases, orders, premises lease etc.
• Details of the business bank account.